I'm afraid @Daleksatemyshed is right.
Doing it now is going to be harder but it's the only way you can change the situation you are in. "if you do what you always did, you'll get what you always got".
If you want to go ahead and adjust the balance of the time spent together then you'll need to plan how, and think about how she's likely to react and how to handle it. You'll be in a mentally much stronger position to handle the fallout - because there will be some - if you plan.
What sort of person is she? Is she the sort to take advantage and consider it fine, because you have 'more' than her? or is she the sort of person who might really not like a readjustment in the relationship but will eventually accept it and see it's fair? Blunt question: does she actually really love you and think you're very close, or is she kinda using you, or is it a mix of the two?
She may genuinely not realise that she's being overbearing. It sounds like she hasn't evolved in terms of what she wants and you have.
How old is her son? honestly, that kinda plays into this too. If he's 7 then it's going to be harder to handle than if he's 16 :( As you are a big presence in his life. Even then there are limits that are reasonable and fair to you all. I think you and your children are probably very important to him and while you are entirely justified in being your own little family of four, it is also the decent thing to do to still be a good presence in his life.
I think you need to decide exactly how much contact you want with her; how often, how late she can stay, how often / if she can stay over. You probably won't get everything you want, but it's going to be a real shock for her to realise things are changing. If you can negotiate enough of a space for you, that may be enough.
Then either simply put it into practice by reducing the number of times she stays over, or making an appointment for next time she comes and making it longer, taking longer to answer if she's a mad texter.
Or more difficult ... a conversation. (Only you know which is the better option, practice or conversation.) "We love you and Nephew dearly, but as the children are growing up we feel the need to sometimes be the four of us more than we are at the moment, and we would like a few things to change, as it feels a bit overwhelming for us at the moment".
She's likely to not take it well - either angry, or hurt. Keep calm and reassure her that you love her and you do want to see her and Nephew, and that you want to be in the situation where seeing her is something everyone looks forward to. Over time she will probably calm down and adjust.
Again, when she does come over, be sure to make an appointment to see her next time - it will reassure her and nephew that you do still want to see her. Gives her a bit of solidity. Answer her texts, but in your own time.
You'll find your own way of handling this depending on her and you .... good luck.