I think of it in a different way. SCREW talking to her. She is not going to listen. She does not think she is doing anything wrong... Would you stop doing something that you loved, just because someone said it was wrong??
I would call the ASPCA and report her... Say a fake name, and that you are one of her neighbors. I know that sounds harsh, but clearly she is not able to provide a suitable home for any animals, much less to keep collecting and adding more to the problem.
I know you are in a spot, but I hope that you can look past friendship, and look to the poor animals that are getting mistreated. I know she may not mean to to do any harm, but she is, and that is SO sad.
*HUGS* to you. atleast someone cares enough about these pets to do something about it