Simple, find out where they go and arrange to have yoru brother meet you there and let him see for himself. Let them work thru it.
As someone who's been cheated on, if my sister knew I would have been so greatful if she'd had told me.
Have you considered the fact that if you do any of these choices you list, you are going to end up being outcased in the family as someone that ended their marriage, not her?
its not your business. if you really feel strongly that you can't go on with your life w/o getting involved, i would approach her. don't attack her about it, just tell her that there's something on your mind that you want to discuss with her, in private. tell her your suspicions, that you don't want to get involved, but you are very concerned for your brother (assuming it is your brother), you don't want to see him hurt. try not to judge - you never know what goes on behind closed doors.
So the 'he' you are referring to is your brother??! if that is the case then you owe it to your brother above all to tell him the truth. It it were anyone other than family or best friends I'd say stay out of it.
I'd stay out of it. Seems like any way to go will create a big mess and bad feelings. He may even be suspecting something already.
This is not your business. Stay out of it. You can not do anyone any good by getting involved and you would only get yourself into trouble. Pretend you know nothing about it.
Blackmail should be off the list. Regardless of the ethical components- when it comes out (not if) you look like the bad guy- not her.
What is the upside of confronting her and not him? Power over her? Nope. All you will do is give her time to come up with a lie or a way to say you are wrong and protect herself.
What if you tell him without proof? It's a he said she said situation. And you'll ostracize yourself from that family unit. (Blood is thicker than water)
What if you tell him with proof? Awkward relationships with the family and you come out worse (again- blood is thicker than water).
Smart move? Keep it to yourself and don't tell ANYONE. period.
Or, if you just HAVE to spill your beans send everything you know to the wounded spouse in an anonymous letter (not email) with the FACTS of it. Make sure there is nothing personally identifiable to get blame pointed back to you. You'll have put it in their court to act on or not. They could have an open marriage and not told anyone. - and type it- don't handwrite it.
And before you do ANYTHING- determine if you are certain or not. If you have even the slightest doubt that it is what you think then do nothing.
Go speak to her say you know and see what she says before making any decisions. Then if you feel you need to tell at least give her some time to come clean before you out her. Warning if she is your sister in law (your hubbys sister) then speak to your hubby or just leave well alone because it could end up causing problems in your own relationship. People don't normaly thank you for getting involved in their relationships but its not a nice situation to be in but give her a chance to explain before you jump in.