I don't know as how it has anything to do with the original poster's relatives and what was going on in their heads at the time, but...
a) I do think heterosexuality would become something different, better, healthier if everyone who ended up identifying as that came to that by a process of self-inquiry and by considering all the options, instead of because it's "normal" and is the default option
b) Heterosexuality isn't as (pardon the expression) straightforward as lots of folks (regardless of orientation) tend to treat it. As culturally constructed, it is NOT merely the attraction of male-bodied folk towards female-bodied folk, or even male-bodied cisgendered folk towards female-bodied cisgendered folk. Instead, it's the tent-stake in the ground that anchors the definition of normative gender in the first place. That which IS perceived as "masculine" is defined AS "those characteristics and behaviors that, when manifested in a male-bodied person, make that person heterosexually eligible within the parameters of the heterosexual courting/dating/flirting/fucking script". Reciprocally, the perception of "feminine" depends on possession of "those characteristics and behaviors that, when manifested in a female-bodied person, make that person heterosexually eligible wihtin the paramters of the hetero courting/dating/flirting/fucking script".
In the absence of such a script, a specific constellation of personality and bevhavioral characteristics would not have become socially eroticized. Or vice versa. They interlock, I mean. Dunno which came before which but they fit together as parts of a whole.
If people just had the bodies that they had and reacted to other people (sexually and socially, eroticically and sensually and intellectually) without reference to a narrowly defined courting/dating/etc script, I don't think there would BE gender. There might still be mostly-binary categories of binary sex, but I don't think it would mean anywhere near as much to people as far as how they think of themselves and what sexual options they consider w/regards to other people.