How do you even begin to manage a narcissist, especially when you’re supposed to be forgiving?

So, before my husband and I rejoined Catholicism, I never had any strong opinions about my MIL. Her personality could be a bit intense at times, and I always thought she was a little scary, but we never had any real issues with her and just interacted with her minimally. However, since having kids —we have a 21 month old with another soon to be here— I have been increasingly losing my mind during interactions with this woman, to a point where I am just frustrated and exhausted by the time she leaves (although I never express it and keep my composure light).

I don’t use this term lightly, because I know that there are certain criteria that constitutes whether someone is a narcissist, has narcissistic tendencies, or struggles with NPD, but I’m pretty confident my MIL is a narcissist, particularly of the paranoid variety. She believes other women are jealous of her while most others are out to get her, and ever since my husband and I became Catholic there has been a strange tension. It wouldn’t be a problem interacting with her if it was just my husband and myself, but since most grandparents want to be around their grandkids I have to navigate boundaries with her seeing our first (and soon second).

This woman has in the past:

-Flashed me three separate times (meaning underwear and bra/boobs).
-Yelled at her own mother for trying to give a kiss on the cheek to our kid.
-Tried to get me on her side regarding hating her own MIL.
-Started playing “When a Man Loves a Chicken” in the chapel before my husband and I received our Marriage Sacrament.
-Continued to express (until her husband told her to knock it off) how my first was going to be “all hers” after we announced our second pregnancy.
-And —which honestly is the point I am most at a loss with dealing with —had decided to hang a recreation of an obscure Picasso drawing titled “Minotaur Ravaging Woman” next to the bedroom our child takes napkin at their house, which literally features a Minotaur grappling a naked woman with two other naked women sitting on each other to the right. Oh, and apparently it’s not actually erotic in nature and my husband and I are just overreacting/having our minds in the gutter…

There are so many other examples, and because every single time I interact with her it’s a toss up whether or not she’ll do something particularly concerning or obnoxious, I have no peace. I just want to forgive her and move on. My husband has said we can go no contact, but his parents live just 20 minutes away and I want his dad to be in our children’s lives. My parents are also elderly, live an hour away, and aside from my dad having some heart problems (having recently had surgery) my mother has some learning disabilities/mental health issues, so I essentially have either no village or a limited one based on when my dad can come over. I really wanted my MIL to be that person I could count on, but she genuinely just scares/frustrates/annoys me and every fiber in my body at times wants her away from my kid.

How on earth am I supposed to be a good Christian and forgive someone who constantly is slapping me in the face and makes me fear for my kids emotional and developmental wellbeing? Is it enough to be low contact with supervised visits? I literally feel too awful about this to even consider receiving Communion because every encounter leaves me feeling more frustrated and anxious (especially as I’m so close to giving birth to our second)… I also genuinely don’t want to punish my FIL by keeping them at an arms distance. Regardless of some of the things we (meaning my husband and I) may not see eye-to-eye on with him, that man has stuck his neck out for us so many times over the years that a big part of me feels like I owe him at least some time with his grandkids.