healingme4me has given you excellent advice....I can't add anything else except, that you're not crazy or stupid....and it truly is better to get it out in the open with her in a non-confrontational way. Try to remember, if she confides in her mom, that is not necessarily a bad thing (everyone needs an outlet, including you, so I hope you can get some therapy soon) and unless 'mom' can't stand you, I wouldn't be completely freaked out about the conversation bump you overheard.

Take care *hugs*