I so understand not being comfortable with the 'crying it out' approach. When my oldest was a baby he slept in his crib only at nap time and in the family bed until he transitioned into a toddler bed by his own choice at about 2 and half - having his big boy bed was exciting for him. (I weaned him at 39 months).
I was expecting to have my 2nd follow the same routine but early on we discovered that he was a lighter sleeper and any movement but us disrupted HIS sleep. I did some research and found that allowing them to cry it out actually teaches them to self-sooth which prepares them to handle disappointments in life. I can really see the difference between the two, and feel that I did a great dis-service to my older child who is a teen now.
Hearing him cry it out was SO hard, I was usually crying in the other room but it didn't last more than a week or so before he learned to settle into his own bed. The rub here is that you HAVE to be firm and stick with it. If you cave once, or even go in to rub their back it will set you both back twice as far and bedtime can become a nightmare for years.
He is 3 now and getting him down for a nap or at bedtime is so easy - he doesn't need to be half asleep before putting him down... all he needs is to follow his regular routine: at nap time he brings his sippy cup of water with him, he gets in bed, gives me a kiss then I turn on his music. At bedtime he brushes his teeth, changes into his pj's, we read a book, gets a kiss goodnight and I turn on his music.
Having 3 - 5 things they always do before bedtime helps prepare them and signals their bodies that it is time to wind down. You can give them the choice of which order they want to do it in (do they want to brush teeth or put pj's on first?) For you it seems that it would make sense that nursing is the last thing, but either do it in her room or the living room.
My aunt and uncle transitioned their kids from the family bed to their own beds by starting with a small palate on the floor next to their bed - but they had their own bedtime routine which was a couple hours before the parents. They were usually around 6 - 7 years old before they slept in their own rooms. On the debate over the family bed there's no evidence that this is wrong or harmful... its a personal choice.
P.S. Nursing a child to sleep does not promote tooth decay (breast milk doesn't contain the types of sugars that decay teeth) or make you a human pacifier, comforting your child is not wrong. The American Surgeon General recommends that all children be nursed at least one year and that it is a lucky child that can nurse for two. The World Health Organization recommends that every child be nursed at least two years. Neither say that a child should be weaned by a specific age, they say that nursing should continue as long as it is comfortable for both the mother and child.