I do not do physical contact well either. My supervisor asked me to hold his tie while he cut something off it. Which meant being in each other's space and I completely froze up and he snapped at me told hold it. So I did, touching it as little as possible. He doesn't know my history though.

Anyway, this acquaintance doesn't sound like a very good friend. I mean, if she didn't know your history than that's one thing. But since she did, then there was no reason for her to be offended. Some people just don't like to hug and there is nothing wrong or shameful in that. People who are into hugging seriously need to understand that not everyone is like them. And they shouldn't push their tendencies on other people and expect everyone to love it.