It seems like the only thing tying her to the property still is the horse. Tell her she needs to find other accomodations for the horse. Once the horse is gone, if she comes over again and critiques something you are doing to the home, I would say that you respectfully disagree with her opinion and would appreciate if she could quit criticizing your home because it's not appreciated. Further, it would seem to be in her best interest, because she finds these changes so upsetting, that perhaps she no longer come over. If she would like to go out for a cup of coffee periodically, that's fine; however, it's upsetting your entire family with her despondent visits at the home.
I dunno. She'll probably be so offended no matter what you say, no matter how you say it, that I would think she'll quit coming around regardless.
Best wishes and please keep us updated.
Jenn