Your sister has been incredibly rude and unpleasant.
I think I would just leave her to it.
What she did was wrong.
I love children at weddings and I would never ban them, but then it was not my wedding and it was not your sister's either.
Focus on your husband and daughter and new son-in-law. Your sister has made her choice.
SassitudeandSparkle "But - it does seem terribly rude to me to invite children to the ceremony and photographs but not the reception! If anyone did that, they wouldn't have time to take the children home themselves, what did you expect them to do"
I must admit I think it is unusual to have the kids there for ceremony and in photos but not for the party, and in a way would have been better to just say no kids at all.
" Also, not nice to say they'd enjoy the reception more without the children - that's for your guests to decide. The B&G meant they would enjoy the reception more without children!"
Maybe they thought everyone would enjoy it without each other's kids. Which is fair enough. Family had time to make arrangements, or say no.
Your sister OP did neither, she said yes and then thoroughly embarrassed herself and you by implication.
I'd await an apology, and if it never came I would accept that making her point meant more to her than her niece and her sister, which is very sad indeed. 