Oh my that's disgusting. And humongously creepy.
MIL sounds like she's in denial. She doesn't want to accept that her partner is being unfaithful. He tried to sleep with another person: that's unfaithful in intention, at the very least, although since he touched you then it's concrete as well... It's easier for her to just blame you than see what's happening. That's sad. But it is not an excuse for her to be so horribly rude to you about it. Nor for her to compromise your comfort and safety whenever her and Creepzilla visit.
Your resolutions sound very good: stay away from him at all costs, keep DH up to date with everything, and be strong. You shouldn't feel bad if your MIL is being unreasonable, and her partner is being horrendously creepy. Try to spend less time around them if you can, since any conversation with him in the room will get awkward fast. Nothing stopping him asking you what seems to be several innocent questions when he's aware that you want nothing to do with him. You do not want to interact with this slime ball.