She sounds like a drama starter. They are everywhere, and sadly your neighbor is one of them.
Yes, she overreacted, so the best thing you can do is let it go, let her have her tantrum and continue on with your own family and take a break from this person.
She is no benefit to you, or your kids. She doesnt sound like a true friend or kindred spirit. She sounds, selfish, immature, and her kid sounds like a brat to boot. Why waste your energy over them?
If you see them then be polite for peace sake but dont go out of your way to talk to her, or associate with her. You dont need her, or that drama in your life.
I live in an apartment too, and It might sound rude, but this is EXACTLY why I dont get to know my neighbors. As great as it would be to find a great friend that close, it never works. In our old apartment, I had a "friend" that lived below us, and it was okay for a bit, but when I realized she was a drama filled crazy, I stopped talking to her for the most part, she started knocking on my door constantly and yelling through how horrible I was, and leaving voicemails on my cell, saying terrible things. After that, I decided being friends with apartment neighbors wasnt a good idea.
So, maybe it's better to just keep to yourself and family for awhile.