This is a very complicated question. Children need their denial, especially in a situation where a beloved parent has a life threatening illness. Please think about this very carefully before you revisit this issue with her. You have been honest with her. I do not think it is wise to ram this or anything else down her throat.
Children take in what they are able to deal with.
I am very distressed by the incident you report about the mother of your daughter's new friend stopping the relationship. If the woman is not honest with you as I suspect she will not be, than I urge you to use all of your skills as a community educator to share your concerns about why she squashed the budding friendship. You need to reiterate that your child is uninfected and has remained so even living with you that proves that there is no danger to her child in playing with your daughter. Tell the other mother that your daughter really liked her and is disappointed that the friendship was not allowed to continue, and that you hope for the sake of both girls that she will allow her daughter to play with your daughter. Experts appearing on this page are independent and are solely responsible for editing and fact-checking their material.