LOVING Ricki's idea... It's the perfect way to bring people into your shop to see everything you have listed. I do think it's tacky that she did what she did, yet I believe she had the best intentions, thinking that since she gave you the credit, she did nothing "wrong". Maybe take a mentor's approach and tell her thanks for linking your shop, that you are honored, and if she needs help or suggestions creating her own original art, you would be happy to chat. Maybe say something, too, like "Let me know if you want to use any of my other items, as I will offer discounts to those who purchase from my shop when they mention they found the link from your blog." That will come across as though you're on her side and that she needs to let you know because it IS your business and livelihood, and that you take it seriously.
I admire your graciousness for seeking advice, instead of just unloading on her! It would have gotten under my skin, as well.
Good luck!