Sorry to hear you have had to go NC with your SIL & Bro. I’ve been NC for over 2 years with my Bro.
1) Grief: The grieving someone when there’s a glimmer of hope conundrum is a tough one. I had no hope with my NPD bro as he was so violent and NC was the only way to protect my family. I still had to grieve him, because I was holding onto the hope I would have a proper brother one day. Not so. But in your case, maybe it’s that glimmer of hope, stopping you grieving in full ? I was told to burn all reminders of him and burry it, as if it was his funeral. And read out an epitath, which worked for me. However in your case, is the glimmer of hope a bad thing ? I’m guessing your SIL isn’t violent or a serious danger ?
2) Family: There are techniques on this website that can help you deal with someone with BPD. To lessen the load. I have recently got back with my BPD mother, and although she’s still a pain in the backside, it doesn’t bother me as much. But someone with BPD will control the imeadiate family, they’re are excellent at this. With a view to setting a boundary in your Family, I guess that’s down to your family. Its hard to tell kids not to speak about family members. But I would consider the tools needed to deal with SIL, if you do the no emotion, no interest, no reaction, monosyllabic tone of speech, a BPD normally ignores you (if only I could master this).