I am posting immediately so that you know that your post was quickly read, and yes, as a grandfather you are more than wlecome on GN, I wish there were more of you.
I understand your problem. it is one that occurs frequently occurs on GN, but usually it is the person in your wife's position posting asking us to support her because her children are edging her out of their lives(DiL's, in particular get blamed) or wanting to know whether her demands for access to grandchildren are unreasonable, once a week and ovenight are unreasonable (they are).
What help and advice to offer you I do not know. I think that by being an admirable and supportive husband to your wife, you have also been unwilling to talk about problems at the start, or perhaps, you have always managed to get over issues by not talking about them and now you are faced with a situation where your wife has gone far beyond any acceptable bounds and telling her that is going to be fraught.
The support I can suggest is that social services/health visitor/doctor, should she contact them, will probably not take much notice of what she says. i suspect that MiL like her are part of the burden they must bear and if your Dil is being seen and treated for post-natal depression, they will be monitoring the situation anyway and, anyway, patient confidentiality means they will not discuss the issue with her.
After that all I can suggest is that you need to face up to the situation you are in and tell your wife she is overstepping the line. Start with praise of all she has done and how much help it has been, but then make it clear to her that her efforts are now overstepping the mark.
You could suggest, and I know this will be chancy ground, that as you must now be in your 70s, if you have been married nearly 50 years, that neither of you will be around for ever, and if her health declines, she may not be able to offer all the help she currently offers and perhaps she needs to ween the children off being so dependent on her, so that they are prepared for when she will be unable to help them, no matter how much she wants to.