Emotions, thin skin and over the daily grind
I hope I can help. Please keep an open mind to my suggestions because it all depends on her personality and her behaviour as to whether you can connect with her again.
Sensitivity- is a tough gig, I know it so well, been sensitive all my life. This condition can be a medical one, a mental health one, so best to visit your GP next time and tell him/her of your struggles with it. It is no good listening to people saying "toughen up" sensitivity is part of our make up. There is also a positive side to sensitivity- empathy and feelings, embrace it as it is rare and wonderful.
The negatives is we get things out of proportion. The way she treated you for example might well be unfair, but does she really deserve to not see her grandchild? You are an adult, going to be a mum, i your child misses out on its grandparent over a squabble it is really sad and can be avoided. The way to do that is to prove to her that you are responsible and grown up. To do this organise a meeting, a casual one say at a cafe- alone!. Tell her you think it would be good to catch up and calmly talk about your future together. Such a meeting has to be tackled delicately by suggestions and boundaries. Tell her you really do want her to be a big part of your child life but you are struggling with her domination o you and that you are aware that she doesnt really mean to be so harsh. Also, most important, is that you are sensitive and you'd like her to talk to you in a way that doesnt upset you. A little tact goes a long long way.
By going about this issue this way you are giving her opportunities that, in case it goes pear shaped later on, will make you feel you have done your best.
A friedn o mine was in the same situation. She allowed her MIL to have a healthy relationship with her grandchild but kept her distance from the MIL. She explained to her MIL that they just dont get along but as long as she is a good grandma to her child she is worthy o a close relationship with the baby. Otherwise it is seen as payback, punishment or not getting along and that really isnt fair.
I hope I've helped. Here is a few threads for you to read.