After this long I would think you'd learn to quit believing everything you hear from her...or worse yet, getting into discussion where you have to hear it. Of course she loves you like a brother right now. That's great. Take what you can get; at least she doesn't hate you. It doesn't matter what she feels or doesn't feel at the moment. It really doesn't, because feelings change.
Now that you've had the talk, I'd shoot for some personal boundaries. As long as you are buddy buddy with her, it gives the message that you approve of her choices, and you don't. You can still be friendly, but it needs to be more like you would be with a female co-worker. Be funny, confident, and a really good catch, but one that she can't have. So, I think your choice to not hug was a reasonable one. As long as you are readily available, I don't think she'll show much interest. Can you walk the line of friendly but detached?
You cannot be lonely if you like the person you're alone with. Dr. Wayne Dyer
