Your SIL sounds like a red-button pusher, desperately looking for a red button that will yield her a reaction. IOW, I don't think this has much to do with her being a Catholic or not. It has to do with wanting to push your buttons, probably because she wants attention, and especially relishes it if she can get it at someone else's expense.
I grew up with a brother who constantly made childish jokes like that because at the time he was, well, a child. He was merciless and relentless and he made me miserable. It wasn't just me, though. My mother used to comment that he just couldn't stand to see a room where people were getting along, without coming in and getting somebody stirred up.
She finally convinced me that the way to deal with it was to take the fun out of it. So when he called me stupid, I would reply in a deadpan: "Yes, I'm about the stupidest person on the face of the planet. I don't know how you can stand being around me." It worked! He quit!
"You're so fat, you're a total hippopotamus." "Oh, yes, fat. It's a wonder I can move under my own propulsion." Then ignore. Just let the taunt lie there and die. "Your teeth are awful. If my teeth looked like that, I'd kill myself." "Oh, yes, my teeth. A great trial, my teeth." Then ignore. If she persists, you can say, "OK. Yeah, I think you mentioned that." More ignoring. You need her to feel as if she's trying to get a banana to play basketball with her. The "stupid" comments will ramp up....let them. When you play stupid and the person calls you stupid, you have arrived. Go with that.
The function of the little agreement comments before you totally ignore her is to give her a patronizing kind of attention. She is not going to mind that you think she is mean. She is going to mind to see that she's an utter failure as a comedian. Never forget that. Really bad comedians don't make people mad or hurt. The worst comedians bore people. It is not that people think their punchlines aren't funny. With the worst punchlines, people don't even recognize them as *being *punchlines. It will drive her nuts that you not only find her a total bore, but that your reply patronizes her effort. You can have no return aggression in your reply, or it won't work. There has to be a "yes, yes, dear, whatever you said. Not sure what it was all about, but we'll pat you on the head, anyway" quality to your response.
The phone message should just be ignored. If she asks about it, pretend you have no idea what she is talking about. If she explains, feign misunderstanding, as if she had some severe aphasia, so she was saying "blanket" when she meant "car". I mean, really play stupid. You can take this to preposterous lengths, if you like. "Anal vibrator? Fire extinguisher? I have no idea what on earth you are talking about." If she is so obtuse as to draw a picture, then you say, "Oh....Oh-KAY. Well, at least I now know why I had no idea what on earth you were talking about." Then let it drop. If she persists, reply with "Yes, you said that." Repeat. Repeat. Repeat. This is a variation on the patronizing theme, but in this case, you act as if you didn't even realize she was *trying *to make a joke. If she comes out and says it was a joke, then, express puzzled suprise.
ONE BIG CAVEAT: What is your SIL like as a human being, other than this? What I am suggesting is only appropriate if she's an otherwise harmless person, looking for attention in an inappropriate way. If she has any of the marks of a sociopath--callous, doesn't seem to feel empathy or remorse, just superficially charming, when there is any effort at all, doesn't seem to make real connections with others, uses people, hates it when anyone else gets attention, and so on--then DO NOT engage this woman. Just stay off of her radar. Sociopaths are the champions of "cutting off the nose to spite the face." A sociopath will either use you, attack you, or ignore you. Choose Door #3, and hope to heavens that she lets you go for it.