I don't think you will win her over by telling anyone...she will be angry and use it against you. She warned you. I know this is a no win situation. My suggestion would be not to tell anyone yet if you want to save the M at this point. Her sister WILL NOT keep it confidential and will sell you out. I have been there too with the promises of family members. She will be loyal to her sister in the end. She will make the A your fault. I am experiencing that now. Your W is in self-protection mode.
I completely agree. Outing your W's affair to her family is going to blow up in your face. She cannot keep it a secret forever, her family will find out at some point. Just let it be from someone else.