Could you move all the Vanguard accounts to something like a spendthrift trust (
https://en.wikipedia.org/wiki/Spendthrift_trust), with you and/or your brother as trustee(s)? That would give you much more control over her spending. If you have power of attorney, that might make it easier to arrange (might it then not require her consent?)
Not to recommend spending more money, but you might want to start looking around for a good estates/trusts attorney who can explain your options. It sounds like reasoning her into a lower level of spending probably won't work, so if you can control the flow of money to her, you've solved the problem.
The good news is that $3500/month - 1150/month SS is just under $30K/year, so if she has 700 + 125 = 825K, she can certainly afford that much. (But not $7-8K/month!)