Keep It Private:

When the kids find it and watch it--and they will find it, and will watch it--they will have a chuckle. Then they will burn it. Then they will forget it. No worries.

P.S.: Glad you had a hot marriage. Most will never discover what such a thing is.

Brotherly Love:

It's not your relationship, thus not your business. It was unfortunate that she cheated on you, but she's clearly moved on. So should you. It's what you would want your brother to do had you won her.

Colorblind:

"And is there a diplomatic way to point out to her that the "mean" girl is a product of her own racist imagination?"

What about: "The 'mean' girl is a product of your own racist imagination. You know that, right?" If she's self-aware enough to call herself a "closet" racist, she had better prepared to get called on it

Confused Family Member:

"At Christmas last year, Beatrice pulled me and my brother outside and asked us why we don't call her 'Grandma.' "

Answer: "We love you, Beatrice, but we don't want to call you 'Grandma', so we won't, okay?" Perhaps add: "But you know this already, Beatrice, so why are you forcing it? It's painful."