Teatpuller raises a good point. We've been in the in-laws' position at a number of gatherings. While we have gotten past the point where we would be in tears (usually the result of extra hormones coursing through one's body, not jealousy or pettiness), and we've been open about it with our family to prevent this kind of thing, the awkwardness for everyone would definitely put a damper on an otherwise joyful event.
Assuming that's not an issue for your family, I agree that I'd like to hear more about your preferences, but it seems like you might want a homey, independent restaurant that celebrates your family's heritage (the GNR list is great for that). Of course, Italian is always a good option -- search here for comfy Italian places in your neighborhood. Sabatino's is frequently mentioned as a favorite.
- Katie