Dear OP,
JayneAusten is entirely right. You want permission to do something that's selfish and come off as unselfish at the same time. If you want a wedding that's just the two of you, own it.
You clearly have no problem with stating what you want - Mexico, your guests to use their own finances/annual leave to travel so far, no children etc. Then you claim that you would be perfectly happy if it were just the two of you, but you've 'invited' 100 guests because 'close friends have expressed they'd be disappointed if we assumed that they wouldn't want to come because of the distance'. Why are you concerned about their feelings and not your future BIL's? He can just suck it up because he was stupid enough to have children? Is that what you're saying? Because that's what he's going to hear.
You know full well that some people who would love to attend will be prohibited by the cost. What makes it worse is the fact that they may move hell and high water to try and get there because they think you want them, when the fact is you really don't. They could potentially put themselves in a financial bind out of love for you and your OH because they don't want to let you down. If they then find out it was all for nothing because you didn't care either way if they were there or not, they will feel more than a little betrayed.
As for children 'ruining' your wedding, surely it's about the love you and your OH have for each other, your vows, your commitment to each other and you becoming 'family'. If it can be 'ruined' by 'screaming/chattering babies' and what you consider to be disruptive toddlers, maybe you need to rethink your priorities. Are you getting married because you love each other or because you both want a 'perfect' (aka 'unrealistic') fairy tale wedding? Is it so fragile that it will be destroyed if a few children make some noise?
If your wedding is the moment you become family AND join each other's families, you and your OH treating his brother and his brother's children so shabbily is not a good start. Families, whether they share DNA or the family we choose for ourselves, tend to have children. By excluding them you're saying they're not considered to be part of your family. Yes, they make noise and don't always behave perfectly. But the only people who would consider that as 'ruining' your wedding are you and your OH. If they are toddlers, it's true that they won't remember your wedding. But when they're older they'll point themselves out in the photos and say, "That was me at my uncle's wedding." They'll like the fact that they were included in this family event.
But that is just my opinion. It's your prerogative to have any kind of wedding you want, just be fair about it. Have the wedding in Mexico just the two of you, then a celebration for everyone (including children) when you get back. Otherwise, as another commenter said, you could end up with key members of your immediate family missing and two work colleagues you aren't that close to.
The hurt that would cause family members unable to attend, either because they can't afford it or because you excluded their children (I wouldn't put my children in a creche in a strange country either), could take years to mend. If I was effectively not invited to my brother's wedding, but two random work colleagues got to attend, I would be heartbroken. If he was then insensitive enough to say I was invited, but I 'chose' not to attend, that would be adding insult to injury. We would fall out big time because that's really unfair.
It would be better to say that in the interests of fairness (because you know it's not fair of you to ask guests to pay to attend in Mexico and then expect them to leave their children with complete strangers), you are going to make the Mexico ceremony just the two of you. Then have a celebration for everyone, including children, when you get back. That's much better than an invite that isn't really an invite (because you don't really want them/their children there), while you prioritise the feelings of your 'close friends [who] expressed they'd be disappointed.' You can't please everyone as you well know, so you may as well play fair and not invite anyone to Mexico. Then it's not personal because you're not showing any favouritism. Just sayin'