Don't panic. The newer treatments for demodecosis are almost always successful. Even when they aren't, the disease is controllable.
Don't be surprised if the hair takes it's time growing back. The mites can cause a lot of damage to the hair follicles. But they do recover.
You're vet is right that she should be spayed. Dogs who have had generalized demodecosis should never be bred, because they have a genetic flaw in their immune system. And if she isn't going to use those organs, she doesn't need them.
However, I wouldn't rush into surgery, either. Give her time to completely recover from the mange.
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