You definately want to invite your sisters MIL. Reguardless of her not knowing anyone it would definately be rude to take her time and her effort decorating to not let her reap the benifits of her hard work (besides it may make for some really uncomfortable family parties in the future if you don't and she does take offense).
For the co-worker, I can't see inviting her unless you invite more. Co-workers are not family and she really won't have a soul to talk to. There is no reason to leave her to feel out of place. She can give a gift if she'd like to I agree with PP on the small carepackage or cookies as a thank you gift.