I have never heard of stress affecting blood sugar.
I think you need to eat more during the day so you don't snack at night if this is your problem.
What diet are you following to lower your blood sugar? 8.5 is very high, you should be under 6. What carbs are you eating? If they aren't complex cut them out- PERIOD. As for milk there are worse things you could be drinking but I'd probably do that milk before bed rather than waking up and drinking it later. And if you do wake up don't drink milk- if you just need something warm drink some hot water and then go back to bed (yes I said hot water).
It sounds like most of your kids are adults now so I'd do my best to not let their problems to stress you out too much to where you overeat.