I'm so sorry you and your wife are going through this. Something similar happened to me, I was inactive when I got married, but my sisters were planning to be in my wedding, which was held outdoors. No church so as not to offend my JW family. About 6 weeks before the wedding (right after my family bridal shower), I was told that they could not be in the wedding, and my brother could not walk me down the aisle. Since a minister was marrying us, they could not participate at all. One of my brother in laws, seeing the distress it was causing my sister, told her to just go ahead and be in it, and deal with the consequences later (he's an elder, by the way). It was my mom who convinced them that it wasn't the right thing to do. I guess I should be grateful they came, but it's a hurt that will never go away.
Even if they don't get married in a KH, the "brothers" will probably still object to your wife being a bridesmaid. Her sister needs to decide what is more important.
Again, I'm so sorry that you have to go through this. Anyone who can look me in the face after hearing about stuff like this, and tell me this is a religion of love is a liar and a hypocrite.
Happyout