My mother-in-law has always had an issue with respecting boundaries, but it became worse once my children were born. She is constantly second guessing me and arguing with me over things like what I should feed my children, etc. It's become quite a hostile relationship. What's the best way to handle this? She's also really sensitive and often uses emotional blackmail.
It is not uncommon for grandmothers (and even grandfathers!) to interfere with a parental couple and undermine the authority of one or both parents. If the couple is not in agreement, or if one of person is taking a hands-off or passive stance, it will be impossible to set limits.
I wish I knew more about your husband's role here! I think your first challenge is to find out what your husband thinks about his mother's behavior and whether he is equally disturbed by her relationship with you as you are. Have you communicated to your husband what you have observed and how it makes you feel? You will not be successful in handling the hostility until you and your husband have, in privacy, reached a consensus about how you can improve the relationship with his mother as a couple, what you can realistically change, and how you can make the changes.
Speak honestly, calmly, and constructively with your husband first and come up with a plan that you both support. If you can't find a constructive solution together, consult a family counselor or mental health professional.