Hi ((((((((((KayZee)))))))) - I hear you loud and clear. Rant away. Its Ok, thats why we are here.
Its very complicated between husband, two little ones, new move, friends (or lack thereof) and not wanting to disappoint in-laws etc. Its very frustrating. You sound like you are being straightforward and wish desperately the N could be too....I think one of the resentments of being a daughter of N has to be juggling all the non-sense and the triangulation and crazy making.
A couple of suggestions:
Its a third bday party - can you put the kids in one room or at a table where they have activities (coloring or crafts, maybe a clown?) and maybe set a table (with namecards) for adults? Maybe you could put your family together - encouraging your Nm to sit with your AUnt/Uncle and put your inlaws at another table. It doesnt have to be obvious so that people feel excluded, just a little separate. Or maybe have each one of the family members to help out a little - someone to come early to set up, someone to stay late to clean up and have little duties at the party, one to put candles on the cake, another to take kids outside, whatever little "directing" you can do to distract. My suggestion is to do a little diversion, but make people feel useful and included.
As for the sons birthday, tell her you have been invited out, no mention of "who" and just go out with him. The zoo, chuck e. cheese, or maybe a picnic in the park. Tell her she can celebrate that at the other party.
I remember the times it hurt me to say NO because I knew I would miss out on other opportunities (in your case, your kids do), but every time I have tried again, I have mostly regretted it. I know there are some people who established boundaries and it did help and LC can be enough, but dont be upset with yourself if this is not the case for you. Its different for everybody and whatever is right for you is OK too. As for worrying about the outsiders, take heart, you sound like a very kind and caring person, stand up for yourself and continue to do so -people will see that there are people out there will see you are perfectly nice, wonderful stable person who come from dysfunctional families and have chosen a higher path, one of concern, caring and detachment from negativity. I think it more acceptable not to get along in a positive, constructive way than you might realize right now and so find ways to make detachment positive, be positive about it and no one will think otherwise.
As for saying NO - I believe in/prefer to just be assertive, but if you are still fearful, maybe easing into it nicely would help, she'll eventually get the message. For example, say something like, Thanks for wanting to see (sons name) on his birhtday, but weve been invited out, so will see you on June 29th. Be nice - say "thanks but No", or "I appreacite this, but No", its a softer NO, but still a NO. Eventually, you wont have to add the frosting before saying No.
Now about that hubby - maybe try a double date with one of his friends as a couple? Or maybe one of your kids friends has a mother you like? Is there anyone in that group, that seems assertive or has some qualities you might like to emulate? Maybe asking someone to coffee might be a good start. You might make a new friend - you sound like you need someone there for you. Whenever I make new friends, I am always thrilled with the prospect that I can put my past behind me and move forward for new experiences.
For some reason, your post really resonated with me - I usually sympathize with everyone here, but dont offer much advice... so just use whats helpful and discard what is not. All the best to you KayZee and son, hubby and daughter. Ales