I mean this gently, but I think it would be helpful to explain to SD that she cannot control her grandmother or who she sees or what she does. Ditto for her mother. I think this idea of loyalty will make her feel like her grandmother doesn't love her because she's doing X or that her mother doesn't love her because she's an alcoholic when in fact both of those are untrue. Her grandmother and mother are individuals and they make millions of decisions without thinking if your SD would approve. That's life. This loyalty business is dysfunctional when you throw alcoholism in the mix.
I think your SD is very lucky to have loving parents in you and your husband. I would try to focus on things you guys can control, your wonderful little family and doing fun activities together, rather than things that you cannot control: your MIL and your DH's XAW.