Firstly I think you should take the holiday. You might have some grim times to come, and you should get a break now, as you might not have a similar chance for a while. I realise you won't be able to put it out of your mind, but try to 'get away from it all' for a while.
Secondly: you can't force her to see the MIL, of course, and I understand how she feels. But you could try pointing out that 1/ the MIL would probably like to see her grandaughter, and may be upset that she can't; 2/ not seeing her isn't going to make any difference to the outcome; 3/ in 5 years, will your daughter wish she has spent as much time as she could with your MIL, while it was still possible?
Lastly, the MIL's doctor shouldn't discuss any details of your MIL's illness (without her specific permission), so it's probably no good asking him/her.
You have my sympathies, in a difficult situation.