I think it is important to understand that now that your son has passed, and is no longer in the military (his remains have been released) this is actually no longer a military law
issue. At all. It is a state law issue.
That said, state law is on your side
You mention the Navy form. I am assuming you are referring to DD Form 93 (record of emergency data). This is the form the military uses to identify who will be responsible for the remains. They (the military) met their obligation when they transferred the remains to you. Now that the widow has taken the remains, this is a state law issue. That is, if she refuses to release them (as she promised to do) you can force this issue. Specifically, you can go to court and have the court order she release the remains to you.
But you would need to go to court in the state she is located in....that is the court with jurisdiction at this point
The fact you have DDForm 93, Record of Emergency Data showing his desire to have you dispose of the remains? That is all the court will need. Bring that to court, show the court, and ask them to order her to release the remains. They will. Her dad is wrong to advise her otherwise. This form shows his wishes..the court will honor them.
YOu will need to have an attorney in her county file this with the court (if she continues to refuse to release back to you).
Please let me know if you have more questions...happy to assist if I can