Seeking advice on the decision to re-home my dog?

It sounds to me like she's a good dog and that you are a good dog owner. I understand it's difficult to make this type of decision but you have to think of what is best for the dog. If the dog would do better in the type of setting that the other people have it may be best for you to rehome her with them and find another dog more suited for your lifestyle. Not all dogs are good for all people and sometimes it takes a person giving a dog up for that dog to be in the best situation. If I were you I would suggest to the other family that they take the dog for a trial period. If the dog thrives better in that environment over the one she is currently in then I think you know your answer.