She has a point. And at no time did you validate her feelings.
As she said, she's good enough for cuddling, but not good enough for the family condo, or whatever. Your boundaries are all screwed up. Are you going with her? Perhaps you could indicate that you think your sister would be okay if you went along, is that acceptable? Obviously taking OM or something would not be.
I don't know what to tell you. You have kind of dug a hole here with the being lovey dovey stuff and then turning around and pulling the rug out. I'm struggling with giving advice here. I'd start with validating how she feels, tell her you understand how it could look like that, and that it isn't your condo so it's hard to let her, without you, go up there when your family has made it clear that she was no longer welcome there. That seem like it could work?
On the other hand, this is reality. If you end up divorced she certainly won't be using her ex-in-laws condo. And for all you know, she has only been snuggly because she wanted something. What do you think? Did she think of using the condo because things are going well with you, or are things going well because she wanted to use you?
You cannot be lonely if you like the person you're alone with. Dr. Wayne Dyer