No shock collar, and no classes (for now). You need a good, certified trainer for one-on-one training. Search at
Association of Pet Dog Trainers - Dog Training Resources for a certified trainer. They will use positive reinforcement to desensitize her to other dogs and children. You may never get to where you'd feel comfortable leaving her unsupervised with small children, but she can learn to turn to you for instruction and rewards for ignoring them.
I'd also agree that she should be spayed, and that you need a new vet!
I had a dog-aggressive Kerry Blue Terrier (35 pounds) who's now crossed the Rainbow Bridge, but I know from that experience that my fear when other dogs approached (fear because I'd gotten stitches from breaking up dog fights) got transferred down the leash and greatly increased her aggressive response when she saw other dogs. So be aware that your reaction will also affect her reaction.
But you need a trainer, quickly.