Yes on #1, yes on #2... no on #3.
You see, my loyalty will always be to my family first and foremost. If I see something that is in any way detrimental to my family or not to "acceptable standards", I will speak up. Too bad if I happen to hurt the friend... family comes first, becuase to me blood is thicker than water everytime and without hesitation.
The friend may have been pissed at me, but the family would have had better pictures than what they paid for.
But...sister-in-law...not sure about the family dynamics, but you always have to tread softly here. Some family might not think you are putting family first, but ego first.
The SIL was arranging the session and other family members prevented him from getting his camera. I would guess they would have thought it would have insulted the SIL as well as the photographer.
To the OP: I think asking the photographer at the end would have been a very diplomatic way of handling it. Unless you really feel otherwise, I don't buy she "forgot" you were a photographer, so I think you're "doing nothing" was probably the best that you could have done. Sometimes the littlest insults can cause HUGE family riffs.
Remember, (and this in just my personal opinion watching friends and ex-friends interact, I don't want to fan the sexist flag,) in general, women take offense easier than men, and hold grudges longer, if not forever. Men can tell each other to take a hike (or substitute stronger language) and mean it, then share a beer an hour later.
So, to sum it up, I think you did the right thing. And no, the pics aren't great. Next time you arrange the get together and you can take the photos!
Lisa