You might have to talk with your friend (and other females who come to see you) before she comes over next about your daughter's touching.
All my friends are really good about my daughter & her boob fetish. Sometimes I think their reactions can reinforce her behavior. For example - my busty friend always shrieks then laughs when my daughter gives her a squeeze. I'm sure my daughter likes the attention.
slap her hand (not enough to really hurt, but enough for her not to like it), as you say 'no!' in a fairly stern voice (but again, not loud or fierce enough to frighten her). It might be the only way to get the message across to her that what she does is inappropriate.
I would have never ending guilt if I ever slapped her - even lightly. I couldn't even consider that - but I can do a firm "no". I think she'd just laugh, though.
I just read an account of one autistic ladies life yesterday (Kanner autism, she is nearly 60 now). She was saying that she didn't understand the meaning of words until she was six. When she learned phonics, and started reading, finally she realized that all those sounds had a specific meaning, and she figured out language. Maybe your daughter hasn't really assigned meaning to many words yet, and truly doesn't understand what they mean. You might need to try to teach her to read for her to get it, too.
I know she understands language, she just doesn't understand certain abstract concepts like dreaming or the question "why" , etc. She understands "no" but she is a rebellious little thing. I am wondering if her crotch/boob grabbing is an attention thing? Trying to get a rise out of someone? I will have to pay more attention to when she does it - but now that I think of it, I think she does it when I'm paying attention to someone/something other than her. Oh! She's devious just like her mother!! :shock: