Aww, I'm glad your babies were given so much love.

Yes, I very much believe that the pinching of cheeks can mean exactly as you have described, which was my first thought too.

However, my MIL is cut from a very different cloth. She has no amount of overflowing love for anyone, other than herself. She is a truly a hateful person, and in this case, which is likely rare, I do not think this phrase was said with love.