How can I express my disappointment to my overly sensitive daughter?

Your daughter is using emotional blackmail to get her way, and it sounds like you encourage it. She has no right to demand her brother watch her kids (or even spend any time with them at all) even if his wife WAS there. You have to get over your need to have her as a "friend." She's not your friend, she's your daughter and she is acting inappropriately. Spend the holidays with your son, and let your daughter know this type of behavior will not be tolerated.