Look there is a reason you decided to post here. Your story has modern similarities. 25 years ago, so no social media or cell phones, and replace "uncle" with best friend and viola.
Like me you are in serious denial. You don't want to see what your gut is telling you something is wrong.
Your wife is gaslighting you, making you think you are going crazy, creating doubt. Blameshifting "You're the one who is jealous and controlling. Has she accused you of "just being insecure" yet?
This is cheater's manipulation to create doubt. Because deep down that inner voice is screaming to you "SOMETHING IS WRONG", and you're refusing to listen.
Your wife is in dangerous territory. It was not a coincidence that he just showed up, this was planned.
Really, which relatives stayed up to 4am???? Which sister fiiinnnaallly went to bed at 2 ish am, so they could talk alone together on the sofa.
Not trying to make you mad here, just wake you up. I am not going to say it involves non-recoverable sex, but I would give it 100% probability for kissing, and 85% close touching if you're lucky. Just saying, if the last person went to bed as late as 3am, it leaves an hour. A lot can happen in an hour.
People here have pointed out enough red flags; and deep down you know the red flags are true. 100% certainty EA.
If you flounder in denial, the potential for PA (if it is not too late already) seriously goes up as long as they have 1-on-1 alone time. Who else went shooting with them, is this an opportunity to go to a remote location, just the two of them?
I can tell you with confidence, replace your three characters with mine, and I know the outcome, mine went from EA to PA in 2mo. - it started with talking.
I stayed in denial "She won't do that", he's my best friend", yeah I too did not follow my instincts and trust my gut.
You may be borderline too late, but I can tell you sit back, don't follow any of the advice of people who have been through this; and you won't like the result.
I haven't finished reading the thread, but if/when she comes back watch for:
She has become cold and distant
She is thinking of a separation to clear her head
She is more argumentative over small things
She tells you all the M problems have been going on for a long time.
If you see radical change, the PA has started. Remember half uncle, not a "real relative". People who become "in love", can rationalize the irrational.
The faster you attack this, the better off you are. I did not have anyone to talk to 25 years ago, I made all of your mistakes and more. The only thing that save me and the M, when I said with conviction "No More". It still didn't stop the pain. Knowing what I know now; telling myself what I know then, I could have stopped/minimized the damage.