6. Wh claims to not remember these incidents. I don’t know how to move past something I don’t know the full extent of. Not know what was happening under the water is driving me insane.
This is gas lighting. You are being gas lighted by not being given accurate information.
Regardless, in the end, the details of what happened underwater are irrelevant. Here's what you need to know, and all you need to know:
Your husband and your husband's brother's wife were engaging in inappropriate, sexually oriented physical contact in the swimming pool. They were in physical contact with each other in the pool, and they were doing so for the purposes of sexual arousal. Your husband became sexually aroused by it. Your husband and your sister in law were engaged in a type of sex. It may or may not have been penetrative sex of some type involving hands, but it was a type of physical contact for the purposes of sexual arousal. It was sex, penetrative or not.
This is way inappropriate. You don't need further "proof."
4. Why didn’t I stop him right then and there and pull him inside and make him go to bed?
Because he's a grown assed man, not a child, and because there was no logical, sane reason why you should have anticipated that the situation would devolve into sexual contact with your sister in law in the swimming pool. WTF?
5. If reconciliation was to occur, how do I spend the rest of my life across the Thanksgiving table from her?
You don't, and it's not required of you. It's not up to you to sit quietly and swallow crow because your husband and your sister in law lack the maturity, presence of mind and basic decency to avoid lobbing a grenade into the family.
They are responsible for this mess, not you. You don't sacrifice your dignity to their stupidity and immaturity.
IF you *ever* come to a place where you can comfortably and honestly accept that these two people are fully responsible, remorseful, grateful for your forgiveness, transparent, trustworthy, *and* you feel confident that they have your best interest at heart, THEN if you are comfortable YOU can extend grace enough to accommodate the family portrait holiday pageant. BUT this is NOT required of you, not now, not ever. It's not up to you to swallow your dignity, your pride, and your boundaries to keep everyone else feeling comfortable.
Your husband and your sister in law are solely responsible for their stupid shenanigans. Each of them needs to get right down to the roots of their individual problems, and each and both of them need to make a full accounting of that to you, the person they each injured with their own damage and issues, BEFORE you allow EITHER of them to impact you again in ANY way, positive or negative.
Every other adult who was present and who engaged in rug sweeping at your expense is responsible and beholden to you for that rug sweeping, at your expense.
Ergo for that reason, I would, after a sense, "blow this shit up." I'd sit every adult present that day down, together if it suits you and if you can stand up to possible group think on their behalf, and explain in no uncertain terms that you and your marriage were violated, both by the two direct participants and their actions, and by every other adult present who is understood to love and value you as a part of the extended family unit, but whom devalued you by ignoring this grievous behavior and not calling it out, intervening on your behalf and honestly, on behalf of *everyone,* and whom continue to act like you and your marriage were not horrendously violated.
It doesn't have to be a nuclear blow up but you have a right IMHO to state your truth, to defend your boundaries and to demand that you, your boundaries and your marriage be respected.
Dignity, Sister, you have it, the others in this situation have apparently abandoned what dignity they had. You don't have to surrender your dignity to make everyone else feel better about their emotionally lazy, immature actions or lack there of.
Every adult present that day owes you a big assed apology for disrespecting you and your marriage, and at least two or three of the adults (your husband, your sister in law and perhaps your brother in law) belong in IC for their shit boundaries and disrespectful behavior toward you, toward each other, toward the entire family, toward their own children, and toward themselves.
Honestly, until they can get their heads wrapped around how abjectly disrespectful this whole situation was and is, I wouldn't expect anything near acceptable behavior out of them, and I wouldn't tolerate any of their noise (or lack of it) at all.
I'm so sorry this happened to you. =(