My deepest sympathies on the loss of your DH, Rolande. Radicalnan makes a good point, imo, that GD may be feeling the sadness, too, especially when in your home. It may not be time yet to all come together for dinners, etc.
"And this behaviour is not because she is a teen, she was like this in her high chair!. She learnt early that it got her what she wanted...
I told them to stop pandering to her, to stop making excuses for her....
I tried to jolly her up..."
Sorry but where are you doing differently? Trying to "jolly her up" is catering to her, also, imo. If her moodiness seems unreasonable to you, better, I think to just ignore it. Let her sit there with a sour face while you, DD & SIL enjoy your conversation, etc. Maybe she won't sulk so much if she sees it's not getting her any attention.
Distancing yourself is a very good idea right now, imo. You need time to heal and you and DD's family all need some space from each other. Don't hold your breath for an apology though. I don't think one is forthcoming, sorry.