You're not crazy. It wasn't until 2 weeks old that any one but DH and I (and nurses/drs) had held DD. Then from there it was family only. We've slowly allowed trust/really familiar people hold her but I still don't like passing her around. There is actually a girl at my H's work that has always been a little to anxious and annoying about asking to hold DD and I have started to avoid her because it just doesn't feel right.
The kissing thing, I just don't understand. I'm pretty sure DH and I are the only ones who have done that..at least until Christmas when H's grandmother comes...I have a feeling she will be loving on the baby but I will probably ask that he address that and not let people kiss on her.
I would just maybe ask your H to address the problems with his parents so that you can feel more comfortable. Maybe He can explain that both of you prefer that when the baby is sleeping, he needs to be left alone and that pictures are fine but no flashes are allowed. Just set boundaries and maybe spread out your days when people can visit.