OP, you need to find out exactly what has been said by the other driver to determine just how certain she can be of what she is saying, and respond to it in your own statement. I'm more concerned right now that you appear to still be using car seats that were in your car when another hit you. You should not be using the car seats you have, and they should form part of your claim through your insurer. Did you report this to your own insurer? You would have been asked, when reporting the claim, how many people were in the car and who was injured. If that was made via the phone, the call should be recorded and that can be referred to as evidence of the information you provided when the claim was reported. If you are still using the car seats you had when your car was hit, that again would undermine any claim you might make in terms of the car seats and/or any injuries your DC might have suffered. I'm not quite sure why your own insurer would not have covered this with you if/when you reported the claim - you need to speak to them about this, and ask them about replacing the car seats. Depending on when this acc happened, any delay in replacing car seats might well prejudice any claim you make, or statement about who was in the car at the time of the acc.
Your own statement should detail what happened in the aftermath, who said what to whom, where everyone was stood, and how clear a view you can say the other driver had of the inside of your car from where you state she stood. You can provide photos of the interior of your car, if she has been asked to describe it, to prove/disprove what she's saying if her description differs from the actual interior.
You also need to check with your solicitor on whether they have intimated any claims on behalf of your DC. It's unusual for occupancy concerns to be raised unless injury claims are received. So, if they are pursuing claims, yet you haven't even replaced the car seats, that will undermine your claim, and strengthen the other drive's claim that you and your DH were the only 2 people in the car.