Good to hear about the work you and your wife are doing in your parish. I am sorry to hear about the couple who had a bad experience with the annulment process. My experience here is that it has generally been healing for the people who have gone thru it.
The reason for the anulment process goes back to Jesus himself. In Mark 10:1-12 he gives a hard teaching: if a man divorces his wife and marries another, he commits adultery against her. According to that teaching someone who divorces and remarries is in an adulterous union. As I say it is a hard teaching, but it was not made up by "the Church," but comes from Jesus himself. While difficult, most people admire it.
I do know couples in that situation who have made the decision to live as "brother and sister" thus being able to receive communion. Others do the best they can, attending Mass, raising their children in the Church, etc. Some are able to obtain an anulment. As you probably know, an anulment is not a "Catholic divorce" but a declaration of nullity, that no true marriage existed. The reasons for making that declaration are sometimes complex and the process can be cumbersome, but like I say it usually brings healing.
Part of the problem with this is that, as you sense, many people come forward to communion who should do a little bit deeper repenting. In the past we took more seriously St. Paul's injunction that a person should examine himself before receiving communion lest he bring condemnation instead of a blessing. Much of my work is with the Hispanic community who seem more aware of this so that other people than divorced and remarried would refrain from going to communion.
Anyway, John, those are my reflections. I hope they are in some way helpful.
Fr. Phil Bloom