I was reading that the model you have is for women 5foot2 to 5foot6. So, it should fit.

It is a cruiser/comfort category bike, which means you are meant to sit somewhat more upright than a road bike.

When you say your knees are too far forward, do you mean they hit the handlebars?

NOTE: You don't want the stem to be inserted less than the minimum insertion line (you may have to lower it slightly from what you describe above).

Photos would help, but I'm curious what you are trying to do with saddle height.

Can you set the saddle height to where the following happens: with one pedal placed at the farthest point from the saddle (down and a bit forward), and your shoe heel placed on that pedal, is your leg roughly straight (knee has little bend or none and you are not rocking your hips to reach the pedal)? This would be the approximate saddle height to use. Also, do this with both legs (one at a time) to confirm correct saddle height.

If you set the saddle height as above, can you put a flat foot on the ground while in the saddle? Do you need to get off the saddle to reach the ground?

Interested to hear what happens with saddle height. After that, other things can be adjusted.