The fact that she lives in a different state and is willing to drive to within an hour of where you live, but not the extra time to make it all the way to your house probably indicates that she feels uncomfortable as well. Probably she would like to meet somewhere neutral for a limited time to make sure that family touches base, but there is not an extended length of time for people to get on each other's nerves.
I would drive the hour-meet late morning timeframe, spend a few hours with them so your husband can see his sister, and your kids can see their cousins, put on a smile, and then get back in your car and head home. If there is gossip/drama-get up to help with the kids or food, etc. Unless she directly gets in your face and starts yelling, drama in such short periods of time can be easily avoided, and this way-no additional drama is created from your absence.
It can definitely be stressful, but it sounds like the circumstances might actually be doing you a favor. Good luck!