I don't think you were rude. Put on the spot, yes, but not rude. It was rude of her to bring the kids, not to mention inconsiderate for all around, the kids especially. We've had this kind of thing happen, too. It's even worse when the parent just stands there, smiling beatifically while their kid (old enough to know better) coughs in your face, then becomes offended when you smile and say, "Could you please cover your mouth, sweetie?"