She sounds quite possibly to be a gossip and I think your instincts were right to put up boundaries.

Good answer that you are looking for volunteer work, that deflected her nosy questioning.

It really is none of her business and you certainly should not feel you have to disclose you are on disability. Honestly I know I would feel like you do too, I think you are having a normal reaction to her nosiness.

A friend of mine has a nosy neighbour who she secretly calls Miss Marples behind her back (Miss Marples is an old lady detective character in the UK). If you can maybe have a little smile to yourself about this neighbour's nosiness.