Well as far as people approching you, I would definetley let them know that it is okay to pet her, but you would prefer it if they would not pick her up, to me it is pretty bold of someone to pick up a dog they dont even know! She is your dog, and I would definetley go with your instinct, you would never want something to happen to her, same goes for the leash thing, I would definetley pick my Snickers up if another bigger dog approched him, they maybe friendley, but you never know what might happen, even just in being playful a bigger dog can really hurt a little yorkie, especially one as small as yours!! Do what you feel is most comfortable, you obviously are hesitant about these things, so always go with your instinct! Just my opinon