My cat will always touch my face (no claws) when he wants my attention. Usually, he is in my arms or on my lap at the time. That does not mean yours is doing it for attention unless she is purring. If not purring, then she is giving you a gentle warning that something is wrong. You are not wrong to assume that the situation could have been a dangerous one, especially if you already have trust issues, since cats can read us like we read a book. Stopping the picking up will help, but you can also try stimulation from other sources to draw her attention. Things like playing with her with a stringed toy, giving her scratching pads and posts, and giving her a cat tower to climb. Also, put the tower next to a window so she can lookout. Tinkle balls and sparkly toys will also help to distract her. It will also give the kids a safe way to interact with her without picking her up.