Your husband forgave you but she did not and, frankly, she has every right to not want to. You participated in an affair with her husband and you have hurt her more deeply than mere words or taunting that she is giving you. You are lucky that you live in the US, where she can toss only words at you, and not in some other countries where you could be put to death for your actions.
While the verbal slings are a bit hurtful to you, especially if it is in front of your kids, you must keep in mind the damage you have done to this woman and her family. If you were to sue her for harassment, for example, she can counterclaim alienation of affection against you. Which claim do you think would carry more weight and more sympathy from a judge or jury of your peers? It would be hard for people in my part of the country, living in moderate Oregon, to hold her accountable for the words she is using without also holding you accountable for the affair you had which has prompted this woman to say things about you in the first place.
As for your neighbors, unfortunately, that is also a consequence of your actions. It is not against the law for her to speak with another person about the indiscretions you have taken and the pain your actions have caused. Neighbors love to talk and they love juicier gossip even more. It is a form of collective punishment, yes, but you should have thought about that before you went and did what you did. It does not in any way excuse her husband's role in this whole thing, and I'm pretty sure this woman will let him have it (if she has not already begun to do so.) She may well not know where to direct her anger yet, though, and she has picked a convenient target, you.
So, while you can always try to file a charge, if the police are not going to get involved and you are likely to lose any legal action you file and pay for her time too, you may well have to adjust to living with this for some time. Eventually, things will pass but you will have to reassess your dealings with your neighbors.
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I suggest you remove yourself from the situation by moving. She is entitled to free speech as long as it does not threaten you with physical harm and that is why the officer could not do anything about her expressing her opinion in the public forum (i.e. the street). While this is a difficult situation, the reality is you have the ability to stop it by just relocating. If her behavior escalates into threats of physical violence or she is damaging your personal or real property, you can call the cops and report it.
This answer is for informational and educational use only. This answer does not create attorney-client relationship. For more details, I recommend a private consultation with a criminal defense attorney.
Asking lawyers to answer this question is like asking Dr. Drew a legal question. Wait a minute. Dr. Drew's show seems to be focused solely on legal cases now. Oh well, I guess I can offer my two cents. You committed a major offense of morality, and inflicted a serious wound to this woman. Your actions may destroy her family. Pack up your remaining dignity and move far away. Your absence will be a wonderful gift to this woman and her family.
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