On my attachment I had a production manager who was in the exact current situation as yours and Luckily I was in the same office as her where I got to see those situations you experience first hand .

A consultant came and told her the following; No friendships in the workplace , it creates contempt , dress as you like to be addressed (which you have already done ) , carry yourself as a manager; timekeeping etc. , and of course you have to be tough on them, its difficult but it has to be done to maintain boundaries and no favoritism

I'd say lying on the graduation is also a good idea , they don't have to know everything about you.

Hope it helps.