| Hi, I think you're doing the right thing by putting her into a toy breed puppy group, that's a wonderful start and I would keep on going. She may be a bit shy, but remember these toy breeds have a lot to contend with too. Every dog who is significantly larger to her, naturally seems dangerous even if its just through clumsiness and she has the intelligence to recognize that.
Children, also, unless she was raised with them, make funny sounds, quick movements, even smell differently than adults, so I fully understand why some of the toy dogs have these fears. If she was a really, really confident puppy these things would not be quite so frightening to her, but she certainly is still young enough to overcome more of these things yet.
After a few visits to the puppy class, I wonder if you can read her well enough to know when you can put her down on the floor beside you, then she will have to deal with it a bit more. Even for a couple of minutes, at a time, with her leash on, of course, then back up onto the lap for a few more, then down again, through the whole class. You may find after that that she can be down much more, the next class.
Keep her exposed to new people, places and objects, noises, etc, I was always extremely careful of mixing big dogs and little dogs, at any rate, but it sounds like you're doing what you can for now. Just don't stop. | 
