Some, but not all of this sounds like John Carpenter's 1995 Film Village of the Damned. It was the second adaptation of the 1957 novel The Midwich Cuckoos by John Wyndham, after the (probably more famous) 1960 version. The stuff about the children matches, but not the element of a elderly woman transforming into an alien to fight two other aliens.
Here's the trailer (featuring Superman, Luke Skywalker, and Lt. Saavik).
Village of the Damned features children with evil psychic powers; they are possessed by some kind of aliens or monsters, and their eyes glow (most often green, but sometimes other colors) when the powers are in use. There are attempts to protect one of the children from being taken over and controlled by these entities.
The plot, per Wikipedia:
The people and animals of the sleepy coastal town of Midwich in California's Marin County fall asleep at a 10 AM "blackout" and regain consciousness at 4 PM. Following the blackout, ten women are mysteriously pregnant, including a virgin girl and a married woman who has not been sexually active for a year due to her husband being away for work in Tokyo. None of them seek abortions after having dreams, and all the babies are born the same night in a barn – five boys and five girls, though the virgin's daughter is stillborn due to umbilical asphyxia. The surviving children are healthy but have pale skin, white-blonde hair, cobalt eyes, and fierce intellect.
However, they do not appear to possess a conscience or individual personalities. They display eerie psychic powers that can result in violent and deadly consequences whenever they experience pain or provocation. The children soon "pair off" like mates, except for David, whose intended mate was the stillborn girl. As a result, David is the outcast of the group. Although he retains some degree of psychic powers, he also has the ability to show human compassion. He talks to his mother, Jill McGowan, the school principal, and begins to understand his situation. The children's leader is Mara, the daughter of the physician, Dr. Alan, and his wife, Barbara. As a baby, Mara used her powers to force her mother to commit suicide by jumping off a cliff. Her mate is Robert.
The children, who now have a bad reputation in town, eventually move to the local barn as their classroom for survival. Local priest Father George attempts to shoot them, only for Mara to use her powers and force George to shoot himself. Soon, it is learned that there are other colonies of blackout children in foreign countries, but due to their inhuman nature, they were quickly eliminated, in some cases at the cost of destroying the entire town. The scientific team in Midwich flees the town to escape the chaos. One of the scientists, Dr. Susan Verner, is forced to show the children the well-preserved alien corpse of David's intended mate she secretly kept for research. The children force her to stab herself. An angry mob gathers to kill the children, but the town descends into chaos.