Talking about the funeral is a way of accepting that a person has died and except for your memories, they've gone for good. For many people it's a form of closure on the life that was (this never applied to grieving Parents, obviously).
I grew up with a Catholic GM, a Christian Mother and a Presbyterian Father. My wider family included believers in Buddhism, Voodoo etc and Native American Spirit based beliefs. Children can understand different concepts.
I understand why you've embraced Mindfullness, after depression, but it parts of it, isn't always appropriate when working through a death of a child, with another child.
Your DD should have been told, sooner and you should have discussed this, with your Mum, before telling her.
Also, if your Mum is a support for your DD, then cut her some slack.
The more a child knows, the less that they fear and the fears that they do have, can be worked through.
My DH died, when my children were young and they've had friends die/be killed.