The matriarch is in a cave that is accessible at two points in the Blighted Village. One entrance is down the well, and the other is through a wall in the blacksmith's workshop. You'll need to smash down the wall.
Get to the matriarch and you'll see the hole. Be prepared for a deep fall and you'll land in the Underdark. You could be sneaky and jump down the hole without fighting her too, I suppose.
Are you level 4, BTW? To kill the spider matriarch, you'll want to be level 4 to have an easier time. And bring light sources.
