Maybe I missed it, but have you considered getting involved in some sort of activity with her? I understand her fears, and I understand the whole BYB bit, and respect it.
Maybe the dog needs something to build her confidence. Agility comes to mind. All that running, jumping, and positive training would have to help her.
IMO, it sounds as if both of you need some play time. I noticed how much you enjoyed seeing her play with the vacuum.
Do you train her? Play mind games, etc...?
Yep we have done activities before, and we both really loved it. It didn't affect her confidence one way or another, but it was insanely fun. I want to get into agility, but the closest one is about an hour away and is pretty pricey. I'm moving in a year so that may change though.
Oh we play mind games all the time. That's her favorite thing. I do a ton of training with her too (took 6 months off due to heart worms, but we're getting back in the swing of things slowly but surely). I live alone, just me and her, so we're constantly finding ways to entertain ourselves. I'm actually trying to work on "are you shy" currently. Should be fun.
I think I made it sound like I'm at a loss as to what to do with her. I'm not. She and I are what we are now; it's just more of a....well I guess you want the best for your "kids" and for me that means that I wish she would have had better genetics and better early socialization (I didn't get her until she was two and those first two years were not good years for her apparently). I can't have that, but raising awareness and making people see the real examples as to why backyard breeding is a problem is what I'm trying to do here. You can tell people it's tough to have a nervy dog until you're blue in the face, but I've found people don't get it until they have real life examples.
I agree with what others have said about the genetic/lack of socialization aspect. That was more what I was going for here.