Oh Maura... I wish there was an easy answer, but there's not. I think you're on the right track in demoting her without telling her.
Whether it's that she just doesn't get it, or there's a bigger underlying problem, is hard to say. Either way, however, she is not meeting her responsibilities - she's not even trying. It's unfair to you, and it's unfair to your other BMs.
So, demote her. Let her figure it out when (if) she gets to the wedding. Send the card to your BM, tell her how wonderful she's been, how much you appreciate her and let her know that she's your "real" MOH.
Your mom's family may have a hissy, but so few of them will be there anyway, it won't make much difference. Besides, they'll probably be too busy complaining that your flowers don't match the color of the sunset or some crap like that to even notice.
It's time for this to be about you and what you want. If your sis or your mom's family doesn't like it, too f'ing bad.