Hi Kate... Big hugs for you. You're not overstepping anything. Whether she's a bio-parent or an inlaw, her alcoholism is affecting you. I'm glad you're here. You came to the right place. And, in my opinion, you did the right thing by taking that innocent child away from your mil (mother-in-law) as well as taking her keys and calling a cab. (I'd be interested to know how the niece's parents reacted when told how much danger their child was in.) Allowing her to drive and calling the police - although that may have hurried her process of "hitting rock bottom," would have been manipulation. And, it may have resulted in an accident before the cops could get to her.
Yes, you have every right to refuse this woman access to your home, and anyone else who makes you that uncomfortable. We call it "setting boundaries." Seems to me that the actual COA (Child of Alcoholic) - your DH - chooses to deal with the situation by not dealing with it at all. And, I sense that you resent it. That is not good for your marriage. My suggestion would be to sit him down and let him know (calmly) just how much his mother's behavior upsets you, and the negative effects it has on the rest of the family. Remind him of the senseless drunk driving with a child (her grandchild?) in the car. Bring up the instances of verbal abuse. Maybe family gatherings have been ruined. Or, maybe she has embarassed family members by making drunken scenes in public. Use the past history - any and all you can remember. Tell him how uncomfortable you feel when she comes over drunk to pick a fight... and that you don't have to put up with it.
Finally, I'd suggest that you check out Al-Anon online. Look over the info with your DH. They have a lot to offer. And, keep coming back here. It really helps to share with others who know what it's like.
Hugs, Minnie