Well, I definately understand your concern for your pups. If little kids came to my house, I'd have to assess the situation and consider if the kids were dog-friendly or if I'd have to preserve my pups health and put them away. But I don't have little kids over my place, so I always let my pups roam where they're allowed.
Guests over at my place don't have much of a choice in whether or not they know about my dogs. (I have a severe case of yorkie vomit) Any friend or family member coming to my house KNOWS VERY WELL all about my furr-children. They'd know they're small, and adults know that small things must be watched for. So it's never a problem. My dogs can come and go, sniff or shy away at their disgression. I honestly think that the only dog that I keep away from guests is Starbuck, my big german shepherd. Ha!
But this is just my own example. You must always do what you feel comfortable with! I wouldn't say you're rude - just protective.