As others have said, adjusting the sag to lower seat height is not the best approach. If you are 5' 9" tall, I would think that the normal height would be perfect for you. tippy toes is fine, you don't need both feet flat on the ground.
If you are intent on lowering the bike, check out this link:
http://www.koubalink.com/
They sell a new link arm that connects between the rear shock and the swing arm that results in the suspension being lowered without changing the sag. It does change the leverage, so the resulting spring rate is less, but you are fairly light so that probably won't be an issue.
My daughter is 5' 2" and used one to lower her bike. 1-/2 inches on the rear, dropped the forks in the clamp and inch (had to raise the handlebars to make room), cut 1" off the seat foam. It is working great for her.
A tip on adjusting the sag: use a long punch and hammer to back off the lock nut. I bought a special tool that was supposed to be for that but there wasn't room to use it!
To adjust the nut that is tight against the spring it is often easier to grab the spring and turn it. "most" of the time the nut will turn with the spring. I have had that method fail, however. In this case, use the punch to drive the main nut.
The direction you need to go should be obvious. Squeezng the spring tighter raises things up.
Rod