YTA. As unpleasant as your aunt is, your wife has given the ok. It sounds like your aunt knows her place in your life and would probably be shut down quickly if she did start drama.

Your making your wife's graduation and party about you and what you want. It's hard enough to be an in-law and I can't imagine having to stress about what everyone is thinking (you did say she was a sweetheart so she will worry) when she should be relaxing and enjoying this moment.

Proper response: OP asks wife if she would like aunt invited or not. Wife says it's ok to invite her. OP says ok she's invited but he has his wife's back. Let him know if there is drama and he will handle his family for her.