I feel as if you're enabling this woman. It is your moral obligation to care for your immediate family. Would you give a heroin addict heroin? Likely not. Yet by giving her money, you will enable her to stay in this situation. Help her see the light of some other alternative. She obviously needs an income. And if she has one - she needs someone to help her manager the out-going expenses. She does not need handed cash. You say she won't call the elderly assistance options? Does not god help those who help themselves? Sometimes tough love is in order. She needs to get off her high-horse and save herself. Nobody can do that for you.
There is no "am I right" or "am I wrong". First, when you say she flipped out because it "WASN'T YOUR BUSINESS" - Dear - she MADE IT your *business* when she leaned on you and others to pay for her obligations! Haven't you heard? The borrower is slave to the lender. She forfeit her ability to have a SAY in this when she lost her pride and her self-respect begging for money. Yes BEGGING. If she needs help, she needs to ask you what sources are available for her to seek out for assistance. Not BEG. She would know this - as if it were my mother in law - she'd hear it straight from my mouth.
You need to have a frank conversation with this woman about her situation. I have a feeling that the reason she believes that borrowing money from you is 'a.okay' is because you haven't clearly indicated to her otherwise. That, in my opinion, is your part of the blame in this situation.