How can social customs and the Sunnah of offering condolences to the deceased's family be reconciled, and who are the relatives to whom condolences must be offered?

The custom of the deceased's family gathering in their home after burial to receive condolences is an innovation (bid'ah) with no good in it. What is prescribed is for the deceased's family to disperse after the burial, and whoever encounters them should offer condolences. Condolences are for all relatives of the deceased, whether old or young, male or female, except for a young woman from whom temptation is feared, in which case condolences to her should be limited to her mahrams. Your mother-in-law's anger at your friends not attending the condolences is misplaced.