Hmmm. My take on it is from a birthmother's POV, so bear with me
I am currently in a situation with my birthdaughter's family where there are some contact issues relating to frequency and one side wanting more, so I see it from that side.
Having said that, you should never do more than what you can handle. You have laid out very clearly what it is that you can handle and I applaud you for not leaving her guessing. My take is that for 20+ years she has had grand fantasies of reunion, and it's hard for her to reconcile reality and fantasy. THAT IS NOT YOUR ISSUE TO BEAR. The fact that she cannot respect boundaries (caling when she knows it would upset you, referring to your children as her grandparents when you've told her repeatedly it makes you uncomfortable) is an issue that she needs to deal with, as she should be doing just that. Not necessarily as the adoptee per se, but as the person in this relationship that needs the boundaries, KWIM? There is the flip side of adoptees who want more contact than their birthparents can handle, and I feel those adoptees need to adhere to those boundaries as well. Pushing or guilting people into a relationship that they are not ready for is a recipe for disaster. Her husband should have not gotten involved, but alas he did, most likely feeling he could "help".
My question to you is where you see this realtionship going say 5, 10, 20 years from now? Are you planning on opening up those boundaries or keeping them in place for the duration? I say that because like all things between living people, relationships need room to grow, or they die. If you think about all the relationships you've had, I'm sure there are very few (if any) that have stayed EXACTLY the same over the course of time. Time changes things, people change, and relationships need the room to change with them. Your birthmom probably banked on that and is testing the boundaries to see where you stand. (and I'm not excusing that, she should just ask you at the next visit if you want to open things up more) I think that you need to reevaluate what you want and what you want out of this relationship and act accordingly, because if she continues to push things, it's going to create issues and resentment that will complicate things further.
If you don't see yourself EVER developing a closer relationship with your birthmom, that's OK, but I think you need to let her know so that she can process that. And if you have, and she isn't, then you need to tell her that if she can't respect your boundaries, you will have to distance yourself until she is able to respect your wishes. But if you want her in your life, I also think you need to think about the possibility of opening up the strict boundaries at some point in order for the relationship to grow.
Good luck!