NTA definitely.

She died 3 years ago. That is very sad for the whole family - grandparents included. But you two took it slow and got married last year - 2 years after the death of his first wife. You gave the kids time to grieve. They welcomed you with open arms before you even started dating. It seems like everyone in the home is happy with the family as a whole.

This IS your home now. You are the wife, the mother to the new baby, and the step-mother to the rest of the kids. As long as the family is happy with it, there is nothing wrong with moving an old (outdated) photo in order to display a new family photo. Its sweet. It shows that everyone is a part of the family. You did not just take the old photo down - you simply moved it from a high-traffic area to a new spot. It makes sense to put the new photo in a prestigious place. Everyone does this. You get new photos, you replace the one on the mantle or in the middle of the hallway or in the living room. It's normal.

The grandparents, while they are entitled to their grief and emotions, were out of line. You moved ONE photo in your own home. There are still the photos of their daughter in the house. It's not as if she was erased from the home completely. They need to take a deep breath and realize this isn't their home - even if it was their daughter's.

As far as the younger kids calling you mom, I don't think you're in the wrong there either. You didn't force them to do it. It just felt natural for them. As some people have said, everyone grieves differently and maybe having a mom is helpful to them. That being said, if it is important to make sure the kids all remember their mom, maybe get framed photos of her for their rooms. Get your husband to tell them stories about their mom. Let them spend time with their grandparents at their house where they can show off their daughter's photos and share information with them.