I am incredibly insecure having had my previous husband have an affair when I was pregnant and then being in a very abusive relationship… It’s a good idea to get counselling for this, as it’s making you unhappy and anxious. Learning coping strategies, self-confidence, and how to trust your instincts and judgment will probably improve your life and relationships in lots of ways. (And if there's some deeper trauma, best to know and get the right help for that, too.)
I think what someone said before about they are still married in all intent and purposes .. this is really the core of my insecurity… From what you’ve written overall, it doesn’t sound like you’re worried that your partner is still “with” his ex or wants to be. You say you’re in a “fantastic relationship”, you’ve both made the commitment to live together. He’s sensitive to your feelings and supportive and willing to do what he can to help, including reducing contact with his family for a while. If things are good except for the stress of the situation with his family and ex, maybe you’re uncomfortable not about your relationship with your partner, but just about the family dynamic and your “role”.
In a big family group there are many roles. Of course she has the role of mother of the host’s grandchildren and of your partner’s children, but apart from that try to think of her as another sibling or an old, close family friend. Be secure and confident in your role as your partner’s partner and let his family see you that way, as their son’s/brother’s/dad’s/uncle’s partner. Maybe initially they care about you because they care about him and want him to be happy and he has chosen to be with you - but let them get to know you and you get to know them. Respect the fact that everyone there has a shared past and you're relatively new to the group, but trust that you belong there and are welcome there too. (This is where I think counselling can specifically help, if you’re feeling too anxious or awkward to relax with them).
You’ve also said [ex] gets very upset if she isn't invited to everything… There are times - like a “family” dinner - when it could be completely appropriate for both of you to be there. If you and your partner host one of these dinners, you can invite who you like, but it could look odd to exclude the ex ONLY, and invite everyone else. But if you frame it as, for example, your partner and you hosting or going out for dinner with his brother and SIL, and/or with his mother (and father/mother’s partner if applicable,) then it would be obvious the ex wouldn’t and shouldn’t be invited. Maybe have a small dinner party with your and your partner's friends and have him invite his brother and SIL. Another poster mentioned (from a previous post, I guess) that you have a young daughter - while it could be a little awkward due to age differences, it might make sense to carve out some time for you, your partner, and the four children to spend together.
Also, are you close to your family (parents, siblings, etc.) and do you and your partner socialise with them? Do you and your partner have a group of friends in common that you spend time with together? If your socialising as a couple is JUST with his family, the situation with his ex may feel heavier than it would otherwise. If the family events are very frequent - like dinner EVERY Sunday night, for example - it may help to take a little time off and do other things together, interact with other people as a couple.