This hardly sounds like a dream job, and the interviewer sounds like an idiot. It also sounds like by mentioning that some people want too much prior to asking you about your salary requirements, she was trying to intimidate you into naming a lower number than what you believe is fair. Plus, if she is does not know how much the position offers, and therefore doesn't have anything to measure your answer agains, why is she asking the question in the first place, and how did she determine that the other candidates were asking for too much? That's just dumb.

It's up to you whether you want to pursue employment with this company. I guess it depends on how badly you need the job. It may just be that this interviewer was inexperienced and unprofessional and the rest of the company is actually fine. IMO, you have nothing to lose by going on a 2nd interview (if they call you). However, keep your eyes open for possible red flags, pay attention to the overall atmosphere in the workplace and to how the employees are interacting with each other and whether they seem happy, and ask a lot of questions.

Pesonal questions like the ones about your family should always be red flags because, while not illegal per se, they are unprofessional at best and well trained seasoned interviewers will generally avoid them. Some articles suggest that when faced with such questions, you should answer the "question behind the question" rather than provide them with the personal information they are asking for (unless you don't mind providing such information and it being potentially used against you). For example, when employers ask about kids, what they really want to know is whether your family life will prevent you from working long hours. If not a problem, you could say "If you are concerned about my ability to work extra hours when needed, I can assure you that will not be a problem", without answering their question directly. "Does your husband work?" Ok, this is just plain stupid. I don't think I have an answer for that, rather than just to say "I am sorry, I do not see how this is relevant to this position". "Do you already have insurance through his job?" Another dumb and highly inappropriate question, especially since the same information could've been obtained with a more appropriate "How important is it that this job provides health insurance?"

Good luck to you in whatever you decide to do!