She does ride with her arms locked, she thinks... not something she ever really paid any attention to. We'll have to check that next time we go out. The saddle is as level as we can get it by eyeballing. I think we've got a level someplace that we could use to check it. As for pointing it up.. she's pretty adamant about not doing that. Same with the nudie pics... sorry guys.
When we get the bike back later on today, we'll check to see if the saddle is not crooked as well. As for the saddle forward/back thing, she's riding a 20" men's bike, so my line of thought was that since it's a larger overall bike, the top tube may be longer which is causing her to lean more forward and put more pressure on the hands than she would if it were a smaller bike (when we bought it, the only options were the 20" and the 17.5" which are the only two sizes in her range that Trek makes, the 17.5 felt much too small, so the 20" it was..)
We'll check all the suggestions later on and report back.. thanks everyone!