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Haha, did something very similar. Like when she mentioned her "Friend" thinking we'd be good together, I said "That'd be weird for everybody. Especially with how great of friends we are." Didn't stop her. Ah well. I think I'll stick to the plan of just ignoring her ioi's and almost freezing her out for them.
No, keep it up. If you freeze her out she'll be confused and start talking to friends ("He's flirting one second and the next he's ignoring me and talking to some bitch!") and you don't want her friends turned against you or for her to get the wrong signals.
It's hard to pick up on a hint the first time. Keep them coming as often as possible. Use words like pal or bud. They may not feel natural but they get the message across.