I agre with what has already been said. I would call that airline again and tell them she is very small and you have an airline approved pet carry on! If you don't already have one I would invest in one! I can't believe that they have a special area for pets in the cargo area.
To me, all the areas in cargo are dark, not well ventilated and smelly!! If they still do not alllow you, then please try another airline!! Most airlines allow 1 animal in hte cabin as long as its in an airline approved carry on that fits under the seats. And they also make you pay an additional fee, which I think is worth every penny, knowing they are safe and are with you at all times!!!! I have yet to fly with Luig, but I have alredy done my homework!!!!!
Good Luck!!!