I'm a reasonably expensive trainer, so I'll drop my two cents.
Before I start, please don't take any of this as snotty or critical. I don't mean it to come across that way. Having a somewhat abrupt manner (my mother calls it "brutal honesty") came naturally with dog training. You know I luv ya, julie, so please take this in the spirit it's given.
I wouldn't muzzle her. That's just going to mask your problem, not solve it. As Saje said, just keep them separated. I was going to suggest NILIF training. My article along those lines is here:
http://www.dogsday.8k.com/custom.html It's the second article down on the page. (Forgive the website. It's being made better as we speak.) You may want to look it over just for a slightly different view on the same model. Please read this too:
http://www.chazhound.com/forums/showthread.php?t=4022 (You can never know too much about dog behavior!)
I know it seems like it now, but this is not, in the grand scheme of things, that big a problem. And you're not alone. I probably get a dozen calls a year from owners having the same problem. If you work with her, you'll discover that she is absolutely not too far gone to be "repaired" (for lack of a better word).
First, if I were your trainer I'd take your dog's collar off completely unless she was going outside, and then take it off again when she came back in. You can bang a little nail into the wall by the door to hang it on, if that helps remind you. But you don't want to tempt yourself with being able to grab her collar whenever she's doing something you don't like. She is telling you that she doesn't think you should grab her collar or pull her by it. Respect her feelings, and find another way to communicate with her.
If there's something she shouldn't be eating, don't give her access to it. It's hard to blame a dog for eating treats that are left alone. The doggy rules of possession say that if you leave it, you relinquish your rights of ownership and it's fair game for the first lucky dog who comes along. You shouldn't be saying, "Why did that stupid dog eat my sandwich? Bad dog!" You have to learn to say, "Why did this stupid human leave the sandwich where the dog could get it? Bad me!" Any time an unexpected behavior occurs, it's imperitive that we ask ourselves what we could have done differently to facilitate a different behavior. 99.9% of the time, when I think, "Okay, what did I do wrong?" I come up with a reasonably clear answer. That last tenth of a percent is the rare instance when the dog reacted in an unpredictable way. This is so rare that you have to drop some ego and adjust your behavior in order to adjust the dog's.
Second, the word "no" needs to become a four-letter word in your household. "No" is like the collar; it's a crutch that isn't working. If you think about it, "no" isn't even a verb. It only says "don't do that"; it doesn't give her something to be doing instead. It's really something of an abstract concept, so let's ditch it. We need to be crystal clear in our communications with Shelby from now on. So instead of telling her, "don't do that", tell her, "do this instead of that." Use your training; give her a command that conflicts with her current activity. If she's jumping on people, tell her to "sit". If she's mouthing an arm, have her "speak". The secret to a well-behaved dog is a creative owner. (A side note: make sure you've taken the time to train each of the commands you use. Too many people just assume their dogs know what "sit" means without actually teaching them. Without training, commands are meaningless. I'll attach a list of books that will help you with some positive reinforcement obedience.)
The most important clue that we have to Shelby's behavior is the way she treated you an hour after your confrontation. She was a regular old happy dog. This tells us that she wasn't being "aggressive". She was merely exercising her social rights. Using NILIF and resource control training will demonstrate to her, in a way she innately understands, that she is no longer within her rights to snap at you or anyone else. It's critical that you follow the suggestions
consistently, or the social adjustment will backfire. Consistency is the key; I can't stress that enough. It's a good idea to work on basic obedience at the same time you practice resource control. It gives your dog the chance to interact with you on your terms in a positive way. She has control over her reward (or lack thereof), and she will learn quickly that the harder she works, the more of those all-important resources you provide her.
My final suggestion may sound silly, but try it and see how much it helps. Type yourself up a little sheet that has six "headlines" and then space for you to fill in your comments. In my problem solving program I call it an "emotional events diary". Make these your headlines:
1. Situation (Describe the events surrounding the event; try to be perfectly matter-of-fact.
First this happened, second this happened, third this happened....)
2. Shelby's Emotional Response (Describe the reaction by your dog to the event. Try to see the situation through your dog's eyes. Use descriptive emotional words like "angry", "sad", "happy", "irritated", "surprised", etc.)
3. Action Shelby Took as a Result (Describe her actions immediately following her emotional response. Then, and this is important, describe what you think Shelby was trying to accomplish by acting this way. i.e. "Shelly reached back and snapped at my hand. She was trying to make me let go of her collar.")
4. My Emotional Response (Now turn those descriptive emotional terms on yourself: "I was angry and annoyed that Shelby was eating my dinner".)
5. Action I Took (Describe your reactions to Shelby's actions, and describe why you did what you did. "I grabbed her collar so I could pull her away from my food.")
6. What Could've Been Done Differently? (Be constructive here. Go step-by-step. Could the problem have been prevented all together? If Shelby has a reliable sit-stay, you could've put her in position before you left your dinner unguarded. You could've put your dinner up high before you left the room, or you could've brought it with you. Next, how could you have reacted differently? You could've gotten a good "sit" and then cleaned up the mess, gone out back for a minute to calm down, then come back inside and worked on some obedience before returning to your dinner.)
This may seem like a lot of work, but it's really not hard. And the benefits you gain in understanding your dog's actions are enormous.
If you follow these steps, I can just about guarantee that Shelby will improve dramatically in approximately a week-and-a-half, and you'll note a dramatic improvement in her behavior in a month to six weeks. This is not an "at-risk" dog. She's just confused. Doing these things will straighten her right out.
Book recommendations coming...