The short answer is, this is your (and your husband's) decision, not hers.
This could have just as easily been a question about breastfeeding or preschool or sports or any number of other parenting topics. Grandparents aren't always going to agree with the decisions their children make, but they need to learn to back off and support their children raising their own kids.
The long answer is, the Catholic Church does in fact teach that anyone can go to Heaven. There is absolutely no teaching that states that unbaptized individuals will not go to heaven.
The Catholic Church also teaches that just about everyone goes to Purgatory. Purgatory is a period of purification before entering Heaven. Unless you mother is without sin, the Church says she will be going to Purgatory.
This is from the Catechism of the Catholic Church:
"All who die in God’s grace and friendship, but still imperfectly purified, are indeed assured of their eternal salvation; but after death they undergo purification, so as to achieve the holiness necessary to enter the joy of heaven." (CCC 1030)
It is not for us (the Church, any church, humans in general) to decide who is or is not "in God's grace and friendship." That is for God alone to decide.
If it really bothers her, tell her to pray and ask God to change your mind (not that that's what you want, but if she really believes, doesn't she also believe in the power of prayer?)