Xeno 50 is ivermectin as I'm sure you know. Since it's absorbed through the skin and is quite strong I am surprised the vet said you could use it on babies. The adults will be ok but since the babies are still feeding I would think it would come through into the milk due to the nature of the way it's administered. If I have to treat mums with babies for mites I use Bob Martin mite spray for small animals. This has always gotten rid of the mites and been safe to use on both mother and babies with eyes still shut (approx 8 days+). To treat the babies either hold the spray further away than you would for the adults so you get a finer mist, or spray on a tissue and then rub over the babies top and belly. On babies the mites tend to congregate in the armpits so that's why it's important to get the belly. As for the bloody ear on the mother, it doesn't look too serious to me - I'd treat her for the mites and if it still hasn't gone after a few days then have another think about what it might be.