I let my first cry it out. All the books tell you to and everyone I've ever known says to as well. However, it had disastrous permanent consequences for him in terms of our relationship, his ability to trust anyone, his security, his confidence that I would provide for him, understand him, etc. from that week forward. However, he slept 14 hours a night soundly thereon. Our second slept through the night from the time she was six weeks old until a year, at which point food allergies created some long-term health issues which interfered with her sleep. We did not use CIO with her and she is an incredibly different child, though understandably they are going to be different individuals. Our third is 9m and we were trading nights - with her getting up 2-3x's/night for a bottle as she had ongoing ear infections and the only time she could eat was when she could eat through the pain - at night, half asleep. I am more on the side of anti-CIO than for now. But both of us were so sleep deprived that we decided we would try at 9m. Luckily, with tubes, the pain has stopped and the eating is on track and now she sleeps through the night.
In 10 years of parenting thus far, I do know some things for sure: While it is never wrong to desire to comfort your child when they in discomfort or pain, it may be beneficial to their growth and maturity to allow it. You have introduced the family bed concept. That will take forever to break if you don't do it NOW. However, some families prefer it and it certainly makes the kids more secure. My kids kick like donkeys and roll everywhere - we would never get any sleep if they were in the same bed with us. Thus, we allow them to sleep in our room if afraid, but on a pallet on the floor.
Some ppl go right to medication, some hold off as long as possible. There is no right answer there either in such a situation. Again, you have to decide what is right for you and your family and behave accordingly.
There is nothing wrong with your instincts, tho the family bed is a major commitment. I would recommend rocking her, singing to her, etc until she's able to fall back to sleep instead of hitting your bed with her for the rest of the night. If you do let her CIO, you risk certain pitfalls. However, the level of sleep deprivation may require you to do so in order to take care of yourself. Remember Maslo's hierarchy from school and be sure to take care of yourself first - if you can't you can't be a good mom. And no matter what your mom, your MIL, or any other woman tells you, in parenting there are rarely white and black situations with right and wrong answers. Each child is different and thus even when you've figured out how to parent one you have to start from scratch with the next. Good luck!