LOL I am 5'5" and I ride a 17.5" Larkspur! I am very happy with it and have even taken it on a century. I have a 15" Muirwoods that I ride in Toronto - and I find that the geometry of it is hugely limiting when it comes to speed.
Some LBS's are more into selling MTB's and the reccomendation is usually that smaller is better - several shops were not really receptive to selling me the bike in the size I wanted. It's possible that the LBS had a bias towards selling you a smaller bike.
However, the advantage of the smaller bike is that the manouverability and acceleration are much higher and more conducive to downtown traffic.
Try a larger bike (borrow one or go back to the shop) and see if it makes a difference. You can also adjust the stem for your handlebars, and get a longer seatpost.
Good luck