The problem here isn't that she had racist friends or family members at her wedding. To me, that's unavoidable, because a whole lot of white people are racist in the "microaggressions" and "only hire white people" way. A lot of my family members are homophobic and racist too--but usually they shut up and act polite. (Or maybe they do around me, because I'll call them out.)

The problem is that she knew they were racist enough to actively make you uncomfortable, use the n-word as a joke (WHAT?) and that she WASN'T GOING TO CALL THEM OUT ON IT!! She wanted you to come to be uncomfortable and to be a "circus animal," like you pointed out. This is several shades beyond racist, in my opinion.

I don't think having no "bad" friends is possible because I believe that 99.9% of humanity is racist, sexist, homophobic, etc. in some way that they may not even know. As long as people are trying to do better and/or your friend doesn't condone it, I think it's okay. (And I'd definitely add anti-other religions and anti-disability to that list!) But having no friends condoning this level of hate should go without saying.