I don't think citronella works, but I guess you could try it. CV80 works, but is like $20 at TSC and is harsh like the other fly/insect repellents, not good if your horse has sensitive skin. Garlic (chopped or powder) in the grain works wonders, but some horses wont eat the powder, and some wont eat it at all. It makes their sweat smell like garlic (not enough to bother you) so insects stay away. Vinegar works well too, just rub onto areas and make sure the skin doesnt react funny. Try it on the rump before the inner legs! Vinegar sounds harsh, but really it is way less harsh than the chemical horse repellents! There is also a powder you can get at TSC for about $10 for all sorts of livestock that is hard core for almost every insect, but again not the best solution for sensitive skin.
As for training, that's a no. Your horse is miserable, and you can't train the 'miserable' out of something, without fixing the ROOT problem. Its really not your horse's fault. Irritating, yes! But its no different than misfitted tack, a bum leg, or previous abuse. You must fix the root problem or else any kind of training wont last. Find what works soon because a horse that constantly swats with her neck all spring and summer may get a sore neck and back and then ride even worse! CV80 (country vet 80) makes a stall sprayer that works wonders, and make sure she has a nice fan in her stall when its hot, and keep her stall pretty tidy - that will really help with her fly irritation. Heck, they even make little bugs you set out in your barnyard that eat your flies, and it actually really works with consistent stall cleaning and poop composting, but that's if you are really dedicated to the cause! Good luck and try the vinegar/garlic first! Then CV80!