DH has been talking to his mom trying to mediate. Currently he wants me to apologize for being rude. I was rude 1x to my nephew which I am willing to apologize for. MIL has said she will apologize. But DH said she's set in her ways and she may continue to say insulting things. I told DH that under no circumstances will I accept or "suck it up" if she says insulting comments. DH just wants everything to go back to normal. He seems to forget I grew up in a family where people didn't talk to other people in the family until someone died. Even then there was still tension. He's from a family where everyone hugs and things go back to normal. I told him that there will not be anymore entire family trips. Something always seems to go wrong when SIL is involved. DH has informed his mom that the December trip to WDW maybe a no go (he wussed out). I told him that I may be willing to allow his parents to accompany us on the December trip but they will not be sharing a room with us. There would be 2 seperate studios rented. DH also said that if I am willing to travel with my in laws again (we do this frequently) that we will not travel to any destination that is not appealing to us. I wasn't too keen on going to Cabo. I would have rather used the money for a cruise or a trip to Central America. He has also stated that he would be willing to fly up and visit his family and see how it goes before we allow them to travel with us. So right now I guess it all hinges on if MIL will apologize and from there treat me with the respect that all people deserve.
Before I even start, let me state, that in NO WAY do I think you should allow your mil to verbally abuse you or treat you badly in anyway. You deserve to be treated with respect and if she cannot speak to you nicely then she should not speak at all (which is basically what I meant by "co-exist in a preveious post).
But, the part I bolded in your post tells me that maybe just a small bit of this has to do with the differences in the way the two of you were raised. He seems to believe that family should be forgiven. Remember, this is his family and maybe you cannot forget but maybe you might want to consider forgiving to protect your husband's feelings?
The part I put in red shows me that maybe, just maybe, there is more of a two way street here. I am sorry but the words "I will allow" just stick out to me. My dh does not "allow" me to do anything, nor do I "allow" him. If I even thought about stating "I will allow your family. . ." the fight would be on. Maybe its just the way you stated it

. Again, this is his family you are talking about here.
Also, in red, is the part about going on an all family trip to somewhere
appealing to you. If your in laws are paying for it, shouldn't it be appealing to them, too? What about the rest of the family going, don't they count at least as much as you do? I noticed in your first post you said the reason the temp on the pool was turned up was because "we" like the pool warm. Does "we" mean everyone there or does it mean you and your husband? If "we" doesn't mean everyone on the trip, then maybe you could have been a bit more considerate of others before turning the temp up since everyone would have been using the pool? She should have
never called you stupid, but sounds like there are more issues here than the way she talks to you.
As for apologizing, if you were rude to the nephew then he deserves an apology as much as you do from your mil. (you said you were willing, but another poster pointed this out.)