I think your motivations are great, and your immediate response was far more effective than dealing with it 2 hours later at home. With kids this age, the timely lesson is essential.
You can't really judge the other mom's response - every parent is different, and there is no "right" way to respond. She may be more private, she may have been a little stunned at your willingness to approach when others recoil, or she may have been preoccupied.
I'm not sure you can actually judge the nature of his disability - saying he is "obviously retarded" might be incorrect. I'm not even sure what the correct term is, perhaps "developmentally delayed"? Anyway, there are so many compound disabilities that it is hard to diagnose from afar and therefore hard to know how to approach or what to expect.
I think there are some subtle changes in language that can be even more helpful - for example, I've heard people talk about "differently abled" instead of disabled. Instead of us saying that someone's legs don't work, we can say that there are all kinds of ways of getting around, and some people use their legs and others use wheelchairs. Some people breathe through their noses and some through tubes. You could say to your children that it's great how this boy's mom got him the medical care he needs and got him a tube, and how she takes him to the library even when someone else might turn away or say he looks silly.
I agree that your child's use of the word "silly" might not be as insulting as it sounds - she may just have limited vocabulary. She could also have been frightened by the tube in his throat, and expressed it as dislike.
Since you already have a strong use of the library, I agree with the other suggestions about taking books out that deal with a variety of subjects. There are some great ones on differently-abled people and their many accomplishments. There is the great Boston story of Dick and Rick Hoyt, how a father pushes his son's wheelchair through the entire Boston Marathon. Rick is now an adult and it's a lot harder for Dick to push that chair, but they keep going, and get more applause than the true winners when they cross the finish line. There are also great stories about people using animals, not just service dogs but also service Capuchin monkeys and other critters, that might interest your kids. By emphasizing what people CAN do (especially if they get the right equipment and more research is done into technological aids) rather than what they CAN'T do, bridges are build and barriers are broken down.
As you go along through your regular day, point out that curb cuts and ramps take away the barriers for people with walkers and wheelchairs, that larger bathroom stalls allow for everyone to go to that restaurant, that movie theaters have sections for wheelchairs so that people aren't left out, and so on. I have a friend who is in the field of Adaptive Technologies - for example, after pushing a friend's wheelchair through summer camp and finding it a lot harder to go down hills, he adapted a set of bicycle hand brakes to attach to a wheelchair to slow it down on a slope. Simple concept, but no one ever thought of it. Approach it by saying how brilliant the inventors are or how great it is that someone thinks about inclusion rather than exclusion. That way you can address it from a science perspective, a love of animals perspective, a recreational perspective, and so on. Eventually your children will be less awkward and more comfortable.
Keep up the good work!