NO it's not a bad thing that your dog sleeps with you. My dog sleeps with me, he even sleeps on his own pillow...he made it his pillow. It's good that you are putting her in "her spot" when she does something wrong. I know it's hard to correct your dog, because i don't like to do it to my baby. When he barks at something i let him bark a few times and if he doesn't stop after 3-4 barks I tell him quiet and now he knows when I tell him quiet he is. It does take time since barking is a very hard habit for dogs to break. Think positive and things will happen. Don't let her sense your uneasiness since they can sense it and promots them to bark.
She doesn't need to be in a kennel..some dogs love kennels. I used one for my dog because he would get into trouble at night, but he was only a puppy. After awhile I would leave the door open and he could in and out as he pleased. Now he doesn't use it and I don't own one anymore. I know that I can trust him in the house while I'm home and away.
If you don't have time to watch her while she is out in the yard keep her in the house more until you can go and and supervise. Excercise is very important, if she is tired out she won't have enough energy to bark or care about dogs walking by.