OFGoodness sake....this is ridiculous! You have done all you can with this girl, and by the way, she's actually a grown woman now, and well able to be a little more reasonable!
If I were you, I'd sit down with your DH and explain that his Disneyfied view of a blended happy family is just not possible in this situation! Obviously, he will continue to want to see his DD, and you have shown you respect that, but she does not have enough dignity to just come to your home and put on a courteous face, so it's not happening!
Regarding future weddings etc, I have a very strong issue with a close female relative of my DH's, so I just don't go to any event where she may be present! If it makes it any easier and more comfortable for DH, invent 'occasions' on any significant dates, preventing you from attending...I do it all the time!
And, as for the remarks she has made about your DS, they are totally unforgivable, and more than enough reason to permanently cut her out of your life...I cannot believe your DH said/did nothing about this cruel streak in his DD!
Don't give it any more thought Eliza, she has made her decision, and if she's so immature she can't get passed it, it's not your problem or your responsibility! Carry on with your otherwise happy life, and just allow DH the leeway to pretend it's all fine....I can do it, so can you, it's worth it!