In answer to your question about putting boundaries in place, the short answer is: just do it. But ask yourself what that would look like. Do you want to keep her as a friend, but could only deal with 30 minutes phone chat a week? Is she so draining that you no longer have the ability to support her and want no contact? Would you be able to talk to her husband, support him to get her help? Depends if he wants to deal with it, I suppose, and it's so hard to get help anyway. Any of those, or anything else, is up to you. Sounds like you have enough to deal with in your life, you do not have to give so much it leaves you drained. Christ, even if you had everything going perfectly with loads of money, it's not okay for her to demand your time like that! Full disclosure, I had a family member who went downhill like this, then at least one friend who was very similar. It was too much, I had to leave them to it for my own sanity, and I don't say that lightly, it was either cut contact or sink with them. Paranoia, which you've strongly hinted is getting really bad, I found too much to deal with, you're right you are out of your depth, this needs professional help.
In the case of a now ex-friend, I didn't have the bottle to cut her off immediately, even though it had got so bad I was ignoring 15 missed calls in as many minutes. It took my partner to say, when I finally sought his advice (he's very good at staying out of things unless asked), you just need to do it, so I texted to say do not contact me again, and to be fair she didn't. But looking back over that and my family situation, I had poor boundaries for it because to me, it was normal, due to said family member. I thought it was okay to let my friend(s) get worse and worse, never seeking help, yet demanding my time to (not) deal with their problems. I've heard occasionally from mutual friends that she's just as bad now as over 5 years ago when that happened. Sad as it is, she simply won't get help. As I say, up to you if you want to stay in touch, keep suggesting GP and/or counselling, work with her husband maybe, take a break or stop contact, but do look after yourself and your child first. And don't let your friend near your child, as I hope my story illustrates, it's not good to let youngsters think this kind of relationship is normal, it's not and it sets them up to repeat that dysfunction in their adulthood. Good luck.