There are some great ideas below. Your plate idea is great too - you could expand that so each family makes a plate (or even each adult) so that you have a full set of plates to be used at holiday dinners going forward.
You could do a scrapbook with each family creating a page or a double-page spread. We did this for a 90th birthday. We bought a scrapbook with clear plastic sleeves, then everyone bought their own background papers and embellishments. People worked on their own but we also had a group assembly table where we collaborated and shared our little extra stickers or spare photos. We wound up with some additional pages such as summer vacations, the beach, childhood, family pets, etc. Everyone wrote a paragraph and printed it out - how this person influenced them, funny memories, a key value they learned, etc. There were no rules - funny or sad or fact-based are all fine. Then we slipped the finished pages into the sleeves so that each double-page spread had a fairly consistent theme. You could have people start this now so they have time to think about it, then bring their finished or very rough pages for final assembly with added goodies, stickers, special scissors (scalloped edges, etc.) and inspiration/collaboration from others. That keeps the get-together from being a madhouse of chores to do, but helps those who weren't feeling inspired. Just assembling the pages can be a form of therapy and family togetherness. The completed scrapbook can be part of the family decorations that gets trotted out every year, or it can rotate from family to family.
Doing something in her memory is a great idea and helps those who want to believe her spirit is still in this world. Find a charity that she loved or that represents her wishes/values, and come up with a group gift. It could be a donation or a bunch of collected items. For example, if she loved animals, have everyone collect old towels (ripped and stained are okay), old pillows, and so on - they make great cage liners and beds for rescued animals at a shelter. If you want a craft to do, collect old t-shirts and sweaters or sweaters, and make dog beds as a group - here's one of many links: https://www.youtube.com/watch?v=82HO-gwmA2s (just search for "dog beds out of old shirts" or something similar). Then, on Christmas Eve, make a family field trip to the local shelter with your goodies. You can take the money you would have spent on Mom's gifts and buy toys, food, cat litter, etc. (Check with the local shelter ahead of time for their hours and wish list.) This also helps kids to see Christmas as a season of giving vs. a season of getting.
If she loved to cook or bake, you could make some extras of her favorites and take them to the police and firefighters who work on the holidays as well as every night shift.
Up here in New England, we have a tradition called a Yankee Swap. Don't know if you have that, but they're common for families that have gift grabs or for office parties. You could call yours "Grandma's Swap" or "Nancy's Swap" if you want to use her first name. Everyone brings one gift, wrapped. Then you choose numbers out of a hat. In order, each person opens a gift. The first person keeps theirs obviously, but #2 and everyone else gets to keep their gift or trade it for any gift already opened. At the very end, #1 gets to choose (since he/she didn't already have a chance). It can be truly hilarious. These can be any type of gifts, or you could ask people to bring something Grandma would have brought or enjoyed, serious or silly. There's also a little game you can play if you don't want to choose numbers - use the story in this link to have everyone sit with their gift and then pass them back and forth according to the story. Then everyone opens the gift they are left with. http://www.scoutingweb.com/scoutingweb/SubPages/ChristStr...
Filling the room with laughter might be just what the group needs.
Good luck. My heart goes out to you. I think the main thing is to allow for everyone to remember her in their own way - there is nothing wrong with tears, but nothing wrong with laughter either.