*hugs*
Are you guys religious at all? When we had to tell Aurelia about Charlie she accepted it pretty well when we explained that his body was broken and it was time for his spirit to go back to heaven. She asked some questions, and said she missed him (still does) but she understands at least that he's still out there waiting for us. You could put whatever spin on that fits your belief system. Sorry for your loss, she was a beautiful little dog.