Thanks everyone, I woke up this morning feeling a lot better about the whole thing. So, I think what we will do is that we will all go. I will be armed with an iphone for DD1, so she is not listening to the service, and she will also stay quiet to be respectful of the other parents there. If DD2 cries, I'll take her out.
If I get any hurtful remarks from SIL, I will imagine I am putting my fingers in my ears and yelling "LALALALALALA!!"
Delerium, your simple question, "what am I specifically angry about" really helped me - reading my answer helped me see that the problem was more about me ruminating over small things. I am a very reflective, introspective person, and sometimes, unhelpful thoughts get stuck in my head and just won't budge. Her comments had been magnified in my mind to the point where they were unbearable. Somehow, reducing them to a few sentences made it seem smaller. I will have to print that question out and stick it on the fridge!!