It is important to shut down the person/people telling you about her antics. They’re called ‘flying monkeys’, and they feed off the drama and your reactions. Don’t shut them down in any serious earnest way (they’d love it & no doubt report back how ‘under your skin’ they are).
Just change the subject lightheartedly, twice, then cut short the conversation using something boring like ‘oops, is that the time, gotta run’.
And yes, your MIL is just trying to get your attention through the few avenues you’ve left open to her. And she’s likely bored. Don’t give her the satisfaction. Count on everyone normal in town thinking she’s a
loon.
As for how do you stop feeling stung, my therapist would likely say this:
Remember that the way your brain works is to dig a groove around thoughts you let yourself mull over. It’s a good thing it does, mostly, so we don’t get eaten by lions. But in these situations, have a care. Try hard to instantly replace the 
thought with another one. Maybe picture yourself at her age, but surrounded by loving family and grandkiddos, maybe at a party. Remind yourself of what a lovely MIL you will be, appreciated and included in everything family. Try and feel sorry for your MIL and her lonely future she’s brought on herself. She has no power over you but these paltry pathetic attempts. Picture her as a tantrumming toddler- they can be annoying and loud, but not dangerous or interesting!
Another tip: I spent 10 years with an evil stepsister trying this sort of thing within my circle of friends. She had a couple of successes that devastated my teenaged heart. I realised recently that because of her I actually developed a lot of strategic thinking skills, a thicker skin and a strong moral compass for myself. I felt (maybe wrongly at the time) that I should live my life in a genuine, kind and clever way- to counteract her lies to anyone who met me. So in the end I made a more beautiful full life for myself maybe than I would have without her antics. And she shrivelled her life and reputation and heart to unrecoverable depths.
I guess this is what they mean when they say living well is the best revenge.
I’d add that your NC strategy will work, just give it time. Cos the VERY best revenge is realising that you haven’t given her a second thought for years, until these threads come up on Mumsnet!