Sure you can. No, you don't tell her she's inappropriate but you absolutely say that you won't do it, no excuses. "No, I am not allowed to be involved that way." If you really feel that more information is required, just say, "It is a professional boundary that protects patients and nurses. Nurses are not allowed to be involved in that way."
Making excuses is discouraged. First, you have to keep coming up with them and second, your client knows they are excuses/not true--that won't help your rapport with her in the long run.
Do NOT capitulate on boundary issues.
No you can't buy things for the baby. Stop this.
I mean this kindly: Whatever the underlying causes of the situation are, you are effectively helping to hide the situation and enabling it to continue.
This is a matter of getting this baby (and mother/family) the help they all need, not a matter of reporting someone from a place of judgment. The reason you are having trouble doing the right thing is because you are thinking about it wrong. Think in terms of getting help for the children.
If you go to that home and basic life-sustaining supplies are not available, you have an immediate problem and you need to take care of it immediately by informing your supervisor and following your policies. If you are objectively concerned about neglect, you must report this--you are mandated by law to do so. None of this is to punish this mother but to get the appropriate help in the home. Keep in mind plenty of children have grown up on cup-o-noodles, cereal and the like; use care to be objective in what causes you alarm. But at the same time if there is no formula in the house or the children are being objectively endangered then you have to get help.
Again, you're thinking about this wrong. It isn't about whether someone is "one to separate families." Or "one to report." If you are a nurse you had better be "one to report" when the situation calls for it; you are mandated by law to do so! If this family were to be separated it would have to be a fairly extreme situation--and if it is, then what is the excuse for leaving the children a minute longer than they need to be? And if it isn't (an extreme situation) then CPS/DCFS will not remove them and will be looking to see what else is needed to help the family and help them come up with a plan.
Do you have questions, or how are you going to handle this?