I really do think that, even though in canon Lily apparently didn't feel they could maintain the friendship, she would have still had a hard time dealing with losing someone who's been her friend so long. I know that, at least for me, even friends who I've drifted apart from, or who've acted really badly and made me nearly hate them, it still hurts to have them out of my life for good. And I like to think that Severus and Lily, at some point, reconciled to the point that they weren't actively upset with each other anymore. Hopefully before school ended. Because I just hate to think that they were both too stubborn to come to terms, especially when Lily went on to marry James - it would have been such a painful thing for Severus to see them together, dating, hearing about their marriage, their pregnancy, etc. I like to believe that during those times, he at least had the knowledge that she didn't completely hate him.
And of course, most or many of her friends after the friendship broke up, they probably would have probably been pulling the "I told you so" routine, even though none of them would have known Severus the way Lily did. I'm sure it would have really bugged her. I don't think she would have been very tolerant of that kind of thing (especially considering the fact that though James was still hexing Severus 7th year, Lily was deliberately kept in the dark about it... implies that she would have found that kind of mistreatment - provoked or not - really terrible.)
So, yeah. I really like that you had Lily notice the way Mary was looking so smug and satisfied at finally ridding the Gryffindor girls of the Slytherin tag-along. I also really loved this line: "... he concluded that he’d officially lost all comprehension of witchkind as he watched her run towards him, like something from one of his sentimental grandmother’s black and white Muggle films ..."