As Mr. Kiran said FIR quash is very rare.
From your message you can try following options. Experts may give more suggestions.
1. If your family members already got bail then ask police to file report to the court (it may be charge sheet or 'mistake of facts' report). At this level police may remove few family members from the report.
2. Take that charge sheet and go for 'charge sheet quash' in HC. Entire charge sheet may be quashed on merit or atleast few members will be discharged.
3. Use those discharged members to file defamation case and other cases (your lawyer may help) against your opponent. Then let the opponent to eat the fruits of their false complaint.
4. Hire good lawyer to fight in the lower court to disprove the charges on remaining persons.
5. Answer for your final question: There are several guidelines, circulars related to IPC498A and DP cases have been issued by SC and HCs. Nobody respect those orders, especially police and lower courts. All business. Only option is wisely "FIGHT FOR JUSTICE".
6. Importantly never think about compromise unless you think you committed wrong. Compromising with a criminal is against our "Holy Indian Justice System" . Moreover you will have to face the consequence (for instance later may be 304B). Fight for justice until you win.
7. Help the society to remove the "False 498A Weeds". Never encourage those law abusers by compromise. This may cause some temporary pain in your family but eventually you will enjoy the real freedom and save the future society from the "WEEDS".
Jai Hind !