There are two major issues here: 1) Your possibly forgiving your boyfriend???s friend of 16 years; and, 2) you being protected from her “manipulations” as you call them. Let us start with this second issue. Your boyfriend needs to know clearly that you need protection from his friend. I suggest that you show him this response so that he can see the seriousness of this.
I repeat: You need to be protected from his friend and he has to help you. Your relationship is the first priority here, not his friendship with her. Your boyfriend has to see the destructive pattern created by his friend, who seems to have strong feelings for your boyfriend. She seems jealous, and her pattern of showing the jealousy is harmful. You say that you both know she will be manipulative again. Together you should both be ready for this and openly communicate with each other when you see this happening.
The next step concerns your boyfriend and his friend. The issue is one of justice, not forgiveness. If—if—they are to have a friendship, certain conditions must be met: 1) She must understand that she is being manipulative; 2) She must be honest about her feelings toward your boyfriend; 3) she has to commit to controlling those feelings; and 4) there will be no more manipulations toward you. Then and only then might your boyfriend and you consider reconciliation with her. If these conditions are not possible, then reconciliation is not recommended because you will suffer once again.
If reconciliation happens in this way so that you are protected, this may slowly increase your trust of your boyfriend. If the reconciliation does not happen because your boyfriend stands strong against the manipulations, this too may increase your trust toward him. After all, he is protecting you.
Regarding the issue of forgiveness, I recommend that you start small. Say to yourself, whenever you think of her and anger wells inside of you: “(Her name) is a person of worth, not because of what she has done, but in spite of that. I will try to see the humanity in her.”
Try to see the frustration and confusion that has caused her to suffer. She now is throwing that suffering onto you. As your boyfriend practices justice for your sake and you practice forgiveness toward her, your feelings of trust are likely to increase toward your boyfriend and your feelings of deep anger toward the friend are likely to decrease.