FWIW, my fiance is 5'5 and has a 53cm womens geometry frame. She rode a 50cm standard geometry frame, and it was a bit too small.
As far as the toe overlap, I'm afraid I don't have many suggestions either. The common solution is a smaller front wheel (like on Terry bikes) but the bike has to be made for that - it's not something you can just add later.
I'm sorry you're having problems with your new ride.
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