I thought it was pretty common knowledge that dairy is mucus forming. If the runny nose has mucus in it than I agree with your MIL that dairy could very well be contributing to it or at the very least making bubs more susceptible to picking up colds. That doesn't mean that kids should never have dairy it just means that too much is mucus forming. The best thing for strong bones is magnesium, it's actually what gives your bones more density... not calcium, besides the calcium in dairy is not absorbed that well into your body, calcium from other things such as nuts and other milks like oat or rice milk is absorbed much better.