Having her sister as the mediator is not promising at all, but I agree with you that it's better than waiting for a professional.
In my experience with someone as volatile as your daughter in law, using the upcoming mediation session as intended will, sadly, blow up in your face. When I've taken part in a 'let's hash things out' meeting with someone who is quick to anger, saying anything at all is a trigger. They never realize it but they've set you up for failure, they don't want you to do your part of the hashing it out because that would make them angry. They don't want to hear what is bothering you and they don't want to solve anything.
It's so frustrating but you're likely never going to be able to say your piece to them, not if you want to see your grandchildren. She won't be able to handle criticism, not now, not ever. I'm not sure exactly how they want us to behave in such a meeting but the only way I know how to get through it is to go in with the mindset of "Thank you for setting up this meeting, I want to hear what you have to say. I want to do what it takes to heal our relationship. We want to move forward."
So, just smile, listen to them talk about the past, but do not bring up anything from the past that's bothered you!!! That last part is so important with these people. I know it's not fair, at all. This is the only way I've ever left one of these meetings with all my fingers and toes.
As for your other son I'd say to keep your relationships totally separate. If you have one sons kids over, don't even mention it to the other. If the other wants to make plans when you have the others kids over, push it off for another time and say "tomorrow isn't good for us, what do you think about Thursday or Friday evening?"
At the meeting, keep the focus off of seeing your grandchildren, they both know that you want to see them. Heaven knows she will use it against you if you do mention the kids.
I don't think I addressed everything you wrote and I'm sorry for that, not very good at this stuff! Take care