Dear Lord...what an awful Witch! I am so so sorry!
That is the craziest thing I have ever heard. I cannot imagine EVER treating my daughter or anyone else like that, children or grown. And the nerve to tell you to sell your rings?! Wow...just...wow.
I too see the alarm in speaking about your kids as "her granddaughters." I don't think my children would want to go spend a holiday with someone who had uninvited me because my situation might make them "uncomfortable." I also don't think they are her possessions. And if she was so worried you would get upset at the email, why say such crappy things?
I am just so sorry you are going through this. Good for you to not take the bait!