Unfortunately, the people who pay for the wedding have a say in what goes on at the wedding. It's not fun, but it does make sense.
To me, it feels that your family won't be happy whatever you do. Some may say that the wedding is for them, but really the wedding is about you and your FI. Since you turned down the money, plan the wedding you want. If family doesn't want to attend, that's too bad but at least not having unhappy people there is better than having people who complain a lot.
Did you speak to your relatives directly? Perhaps your dad was influencing their opinion and hearing your plans directly from you might help.
I'm not sure what to say... aside that you should do what fits best for the two of you. Those who are meant to be there, will be there.