I am currently breastfeeding my 4th baby. I usually nurse between 2 and 3 years. I can tell you that the first few months are definitely the most difficult. Nursing more during growth spurts is just something you have to deal with, but sounds like you are doing a great job sticking it out. It won't be long before your baby is eating solid foods, and nursing maybe a little less.
Thrush (yeast) can definitely make the breastfeeding experience miserable. Make sure you are not eating too much sugar, because that can aggravate the problem. Also, start taking acidophilus every day. You can even give powdered acidophilus to your baby (put some on your nipples prior to each feeding). I buy Jarrow brand from Whole Foods.
If your baby's position is not causing you any pain and your nipples aren't breaking down, then I say let your baby nurse that way. My mom is a Lactation Consultant and she always said it looks like my baby nurses way down on my nipple, but it doesn't hurt and my baby is growing. If it is hurting, then just keep repositioning her until she figures out she won't get to eat unless she does it differently.
It doesn't sound like you need to be supplementing with formula. The breast is never completely empty. Just like saliva, more will always be produced. The milk ducts get emptied, but the body is constantly refilling them. The milk flow just slows down quite a bit after the milk ducts are emptied. How much you can squeeze out or pump is not an accurate measurement of how much your baby is able to get out. The baby's suckle is much more effective than a pump or your hand. Just make sure the baby is getting at least 6 diapers in 24 hours, and that shows the baby is getting enough. Also, continuing to let the baby suckle at the breast, will cause the body to respond by making more milk.
If your baby is fussing at the breast, it is not likely because your baby is still hungry and not getting anything. Maybe she needs to burp or needs to poop/pee, or be changed. Sometimes my baby gets fussy because he wants suck to go to sleep, but his belly is full. You can try swaddling, bouncing, and shushing, or try giving a pacifier.
If your milk supply is truly low, like your baby is not growing well or not putting out enough diapers, then there are some things you can do to increase your production. First and foremost is to nurse your baby more. Reduce your stress level. Have a glass of wine or a Guiness (known to increase milk supply). Also, Fenugreek is an herb that can help boost production. I have a feeling you are making plenty of milk from what I read though. Giving formula is only going reduce your supply, and it's not as good for your baby.
Get a support group for breastfeeding and parenting. Talk to friends or join La Leche League or an attachment parenting group (AP International or search yahoo groups)
Remember that you need your sanity as well. Take breaks when you can get them. Have a glass of wine. Get a babysitter and love on your husband. Write in a journal, talk to a supportive friend, or just take a moment to cry. You only have one baby right now, so it shouldn't be too difficult to get someone to babysit for an hour or two. Try having 4 little ones. I barely get time to feed myself or sit down. One positive is that I'm back in my old jeans already, a month later. LOL!