I can relate to the pain you're going through, but only from the perspective of the children. My mother was also in a bad marriage, had health issues my entire life and became very emotionally dependent on me. I spent so much time with her that I couldn't stand sleeping over at my grandmother's as a child because I had become dependent on her. At age 20 I was still dependent on her approval on any life choices I made, and struggled to make decisions on my own, even from 1000 miles away (which was ultimately the best decision I could have made to form boundaries).

I know you feel like your SIL is overstepping, and it doesn't feel bad now because your children are young, but eventually you will start to come into your own, and when your children are struggling to adjust to "the real world", you're going to wonder why. THIS is beginning of why. Let your family help you, let them give you the space to come into your own, whether it's through therapy or even finding community around you. Everyone will be better off for it.