The first and most important thing is to prevent the bites/snapping incidents from happening. When you are on your camping trip, do not leave her unattended or wandering loose. Keep her confined to her kennel or on a leash with a responsible adult on the other end. If anyone comes up to pet her, stand in front of her to block the interaction, and go ahead tell off kids and adults alike they should always ask before petting a dog. It's for their own good, your dog isn't the only one that might bite them. If they do ask, the answer at this time will be no. You can say no she bites, no we're in a hurry, or just plain no. Only pick her up and walk away if absolutely necessary, as picking her up at that time will send her the wrong message. Use the same caution around guests to your home.
If you did a good job of socializing her as a pup, I am going to suggest you do it all over again, but in a very controlled manner. The best people to start your work with are people who know dogs, are comfortable with dogs, are unlikely to get bitten. For example, the doctors and staff at your vet clinic, staff at your local pet store or groomer, and some family and friends. When going to a public place, try to go at a quiet time so there won't be many customers or clients there.
Tell them what you are doing to make sure they are comfortable with it. If they agree to help, go get your dog and walk her in on leash. Keep in mind that stress runs down the leash. If you are worried that she will bite, she will sense this and she WILL bite. Being calm will take practice on your part, but remember you have carefully selected good people to work with. Reach out your hand and say hi it's nice to meet you. Talk about some cheery aspects of your dog, so that you and your helper are both looking at her. Shake hands again before you leave. As you are doing this, watch your dog for signs of fear, nervousness, or acceptance of the stranger. We would like your dog to focus on you and follow your lead whether a person is okay or not. Do this with several people and several times with each if you or she is nervous at all until you are both comfortable.
It is not important that every stranger off the street can touch your dog, but it is important that she can be handled by you, your family, and your vet. Give your dog a massage and mock check-up. Touch every part of her body, poke and prod as if you were a vet feeling for anything unusual, look in her ears, in her mouth and eyes. Pet her in ways you don't normally pet her, on her head, backwards, imitate the actions of a potential stranger or small child. Pick up a foot and pull gently, touch the hollow between each of her toes, pull gently on her ears and tail, grab your hand around her muzzle and apply gentle pressure. She may resist you, she may even yelp out of surprise. Practice, practice. When you are sitting on the couch or floor, help her relax and lie down and gently roll her onto her back. Repostion her legs and head all different ways until she becomes completely comfortable with you doing whatever it is you want. Once you've had success with it, teach your husband and then your children. Help your dog to learn complete trust in her family and to lose any inhibitions to touch.
Back at the vet (or groomer), you will then be ready to have someone else touch. You may wish to have a cloth muzzle on her the first couple times as the gentle touch and pressure on her muzzle will help her be calm, and her inability to bite will help you relax. Greet the person with a cheery voice and hand-shake, pick your dog up and put her on the counter, talk a moment, then give explicit permission for the person to pet your dog. If she merely tolerates it, progress very slowly to more of the all-over touching you have practiced. If she enjoys it, allow a greeting with her on the floor and if she wants, to approach the person for more petting.
It will be a wait-and-see whether strangers on the street will ever be a part of this. Chihuahuas have a reputation for being stand-offish with strangers and many chihuahuas are that way. If that's the case for her, your goal will be for her to be comfortable around strangers rather than lunge, and to sit calmly at your side as you have a conversation. But some Chihuahuas are very outgoing and friendly, let her tell you which sort of dog she was born to be. Understand that her growling means it is time for you to leave, but work towards increasing her comfort so it doesn't reach that point.
The pillow is a completely separate issue, boredom, loneliness, separation anxiety, or a difficulty distinguishing between her stuffies and your items.