Only seen me in a speedo

[Torchwatch]

Decide what you want, then make your personal rules.
If you just want someone pleasant to chat to while the children play then make it clear to her that this is the limit of your friendship.
You've probably gone past the point of a one night stand, it would make things too complicated especially with children involved, so if this slips into a relationship expect it to be medium or long term and with emotions involved.

Dog owners often go through this situation as walking a dog tends to attract other dog owners.

Whatever happens try to ensure that all four of you enjoy the situation.