Since she's "vertically challenged" like I am, I'll tell you what I did.
I started out on an XR250. It was tall, but had good suspension, and was pretty easy to start, so I thought I'd be okay. Wrong-o! I rode it around gently (crashing frequently) for a year or so and sold it and got into quad riding (which I still love).
A few years later, I wanted to get back into 2 wheelers, but this time I bought a cheap-o used XR 100. I only rode it for about four months, but I really got aggressive on it because I had no fear of falling over! Heck, I could just stand up and it would drive out from under me if I got into trouble.
From there I stepped up to an XR 200. I rode it for about 2 years -- LOTS -- went through about 3 back tires every season. I did everything possible to it, Dual Sport kit, bored and stroked, ported, Works shock, etc. Loved the bike, hated how it handled at speed.
Finally stepped up to a new XR 250 this year. I do fall over more often (even after lowering it), but I go faster in the rough stuff (still miss the torque of that stroker XR200 though!).
Anyway, my point is, if she is comfortable on an XR 100, buy a used one and let her thrash it for a few months. Then when she's ready to step up, look at the TTR 125 or even something like the newer XR 200 (94 and later have a smaller chassis), CR100, or KX 80 big wheel.
At 5'1", she really will have trouble on even an XR 200. Of course, once she becomes an aggressive rider, height is less of an issue.
PJ