I think only you can know how she might react.
Is she likely to make a scene? Is she likely to want a dramatic reconciliation? You mention your mum - where do your parents sit on the issue? Will they support one of you over the other, or will they try and remain neutral?
On the other side, when my sister got married, her MIL made it all about how stressed and uncomfortable she was going to be at being in the same room as her ex husband (ex of approx 25 years at that point) and refused point blank to go if "the other woman" (again, of 25 years) was invited. It put a huge amount of stress on my lovely BIL and it tainted the wedding preparations and some of the day for them, as they were both stressed and anxious about how MIL would react. She was po faced all day, but didn't cause any arguments in the end, but they were scared that it would be tears and playing the victim.
In your situation, I would say to friendly family members " I want to go to brother's wedding, and I don't want to stress him out or cause any issues. However, I am very nervous of seeing Sis again. It would be great if you could keep an eye on the situation, and if you see her heading in my direction, if you could head her off at the pass. I'm not asking you to take sides, but I'd rather not have any sort of confrontation or awkwardness at the wedding".
Re your son, do you have a partner and could you either leave them both at home, or say that your son is to stick with your partner and not to worry about "silly" cousin. Say that cousin is a lot more grown up now, and in any case won't be a problem at the wedding. I can't help thinking that if he still remembers an incident like that 2 years later he's had some help in remembering it. I'm not saying you've blown it up, but when my daughter was 4 she broke her leg, and had forgotten when we mentioned it at 6. It was quite a traumatic thing at the time, but as it hadn't been discussed since, she had forgotten about it.
We're all guilty of talking about situations in front of our children without realising they're listening and absorbing. Your nephew doesn't sound like a monster, just was self absorbed and stupid and on drugs. His behaviour was scary to a 4 year old, but if that's the only example you've ever seen of it, it's a lot to tar him with a scary, evil brush in the eyes of your son.
Do you think it's possible that you could sit down with your sister in advance and talk things over. It sounds like a situation that has been blown out of proportion - I wouldn't have an issue with my 17 year old nephew looking after my kids for an hour and would trust my sister to make that decision without consulting me. If she knew he was on drugs or behaving erratically that's different. but your post reads as though she didn't know at the time. She's probably sorry for her error, but has gone all tiger mum about it, as often people do attack when they feel their children are being maligned, rightly or wrongly.
In any case I think you should go and not stress your brother out about it. 10 days is a long time, so unless it's 10 days of planned activities, make the most of the holiday and go off and sightsee the rest of the time, and enjoy it!