Can I adjust my blinds for both ventilation and privacy?
If your room is upstairs, have your blinds tilted upwards; the opposite if downstairs.  At night, turn on your lights and slant your blind the way you like and go outside and see how little you can see (if at all).  Having bigger blinds will make it so there are fewer gaps but still the angle is the main issue.

I doubt if the neighbors really pay too much attention unless they are very nosy.  If you are doing your best to close the blinds and they still are annoyed, that is their problem.

As far as legality, you are closing your blinds and what you do behind closed doors is your business.

All the best.