The behavior I was thinking that wasn’t going to get better was hers. She insists that he pay for their (parents) vacation, she has a room set aside for them, she says she’ll work on it but no progress has been made. I don’t think she’s changing either.

Before proposing would be a great time to find out how involved she thinks they should be in your relationship, and if that’s how you see your future, and if this is the kind of discussions you’re ok with going forward.

Absolutely tell her! With your other comment about them staying over night regularly, you also want to be on the look out for them taking matters in to their own hands.

Also, if you’re looking at popping the question, some advice about being married: it’s the two of you vs the problem. Not you vs her vs the problem. Tell her about this so the two of you can move together jointly. It doesn’t have to cause a rift if you tackle this as a team.

Is that because she has problems setting boundaries with them or because this is something both of you want?

From this conversation with them alone, you two (just her and you, not her parents involved) should talk about boundaries. This is a wonderful moment to look into your future and make decisions about it now.