Nail on head.
I've seen this weird phenomenon happen in my own family many years ago and I still don't quite understand it.
My sister died when she was 21 and I was 20. My sister was an awesome person and my closest friend since we were old enough to talk as we were only 11 months apart and I skipped a grade early on, so we were also in the same grade, same classes, shared a room, shared our group of friends, etc., ever since childhood. My sister was a normal person with all of the usual virtues and vices. She was lovely, smart, sophisticated, well-rounded, funny, intelligent, and well-travelled for the time and her age. She also smoked occasionally, drank occasionally, partied with the best of us, while also imparting some words of wisdom to me, her younger sister, along the way. She was very much liked, loved, and admired by peers, friends, and family.
But after she died of ovarian cancer (which was pretty rare for someone so young, and which had absolutely nothing to do with occasionally smoking or drinking and otherwise leading a normal lifestyle), my mother suddenly had a case of selective amnesia in which she would insist that my sister never smoked, never drank, never swore, never did anything other than be a virginal saint-like entity. This was complete BS and it seemed bizarre to me that my own mother would think, let alone say, such things. To me, it was as though my mother could not acknowledge my sister's true existence because my mother suddenly thought that thinking my sister anything less than virginal and angelic was somehow detrimental to her memory. I argued with my Mom about this a few times because, to me, it seemed wrong of my Mom to try to re-package my sister as virginal and saintly because there was absolutely nothing wrong with her as she was! She was a wonderful, caring, smart, sophisticated, funny, well-travelled, and well-rounded young woman - she didn't need what I saw as "re-branding" - but then I realized that it was just something that my Mom personally needed to believe for her own reasons, in order to deal with her own grief (a grief that I fully acknowledge I have no idea how I would deal with it if it happened to me - that being the death of one's child) so I decided to just let it go in order to give my Mom what she needed. That was all back when I was 20 - 22.
But I never forgot it, as it taught me a valuable lesson about how emotion can cloud one's judgement, and how it can result in an otherwise rational person feeling the need to erase and rewrite reality for his/her own purposes, and also how those purposes need not be nefarious but more of the self-preservation sort for emotional reasons.
So, I can understand the emotional need of Ms. Kercher's family to try to re-brand Meredith as virginal and saintly, even though neither is true, but this kind of thing has no place in a court of law, and it would be absolutely wrong for them to attempt to influence a court by remonstrating such in a criminal trial.