Possibility...
I too had about 500 questions after watching this movie. The more I thought about it, the more it made sense, yet at the same time, the more twisted and complex it got. I read quite a few of these other ideas of what happened and now I offer this as a possibility.
Danika never even had a family to begin with. She was always (or for the most part) homeless. She probably did have schizophrenia. She never got over the death of her brother nor forgave her mother for not keeping a close enough eye on them. She fixated on the event. That may have been the starting off point of her insanity.
She obsessed over certain events that happened involving children. But in the end we see that all of these events came from newspaper clippings in her cart. Is it possible there had also been a clipping about a mother and children that had been in an accident? And she somehow molded that into her life? Fitting herself into each of the situations in the newspaper clippings she had? She put herself in the situation with the little girl by being on the street and seeing her be taken away, put herself into the bus accident by being at the store when the breaking news came and so on. Could it be possible that she had simply put herself into the accident with "her kids' death" by her sitting on the bench watching the van crash into the bus? She did this with every other tragic illusion involving kids...why not this one too? She also used the same characters for different roles in the movie, like the nanny/shrink, the man after the "murder" in her house/man there after they had wrecked, man taking the missing girl/creep in her daughter's closet, and I'm sure there were a few more. She just kept building illusion upon illusion until they started to mix together in a way that even confused her, causing random illusions such as the dead dog in the water and the girl shooting up in bed next to her.
Maybe this whole thing was just another delusion her twisted mind factored into her reality. Why not? Nothing else she imagined was real, why should this be any different?
She is nuts, after all.