I think something should come from management to all of the employees, about the importance of hygiene and respecting others in the workplace by keeping to a certain standard. I don't know what I'd do if management refused. Probably go the route of trying to put up a generic sign about hygiene somewhere in the office for all to see, if I was allowed to.
In terms of the personal space issues, I would be all over this one. As soon as you step back and she steps forward I'd hold out my arm and say "I'm sorry, I have some issues with personal space. It makes me very uncomfortable to have someone too close to me. Please don't take it personally".
"I don't know! I don't know why I did it, I don't know why I enjoyed it, and I don't know why I'll do it again!" -BART SIMPSON