She's behaving normally for a pup that was taken from it's mother far too early. If she was with her mom, she would be learning bite inhibition. It's now up to you to teach it, but physically punishing her is more likely to make it worse than better. You'll risk making her aggressive.
Ladyjane started a good thread on bite inhibition:
http://www.yorkietalk.com/forums/tra...nhibition.html