Im so sorry for your husband and dog, that is aweful.
What a rediculous woman! After all the she started to hit your dog with a bag? I think i would have punched her at that point, despite the dog ripping into me, heh.
Unimaginable, i hope your husband and dog recover fully and that you can start enjoying your walks without feeling like a target, i don't know what i'd do in your situation, but i really hope things change.

There should be dog walking fields that require an entrance exam or something.