Tinky, I am beyond amazed and disgusted at your mothers and husbands behaviour. If she was straddling him (not sure if thats what you mean by she was draped over him) and she had to adjust her dress back down, are you sure no penetration occured/possibly happened, in that, do you think you may need him to get tested for any STD's?
Perhaps mention that to him that if you contract any STD's you know who's to blame, and the way he reacts may show you if something did indeed happen, as it is commonly known that a cheaters first defence is deny, deny, deny, then admit but only something minor, then eventually admit something serious did indeed happen, so it worries me that he denied, then admitted it did get 'too close'
.....I am so so sorry this has happened, has your mother done this with any of your previous boyfriends/partners? It seems like an almost competitive thing, as if she is jealous of you and your youth, so she sees it as "she wins" if she manages to seduce your partner....is she much older than you/DH or is there only a small age gap?
She does sound like she has some mental health issues that perhaps she needs to address, cracking onto your daughters DH is NOT normal. The fact that your DH did not immediately recoil in disgust and horror is a big worry, has he admitted he has an interest/attraction to your mother? the big question is: IS this the FIRST time this ever happened, or is something that they have done before when you are at their house?
Good luck sorting it all out, are you going to see a counsellor when you get back home?