To pah the OP, I've been a custom framebuilder for almost 50 years. That includes being a fitter to know how to design a custom frame off of their position. During that time almost half my customers were women. What I can tell you from looking at the picture of her setup on her beloved Litespeed is that her racing position on that bike is not what she will now find optimum over 25 years later - especially if she has back issues. Most women in the middle of their life would prefer having their handlebars at least as high as their saddle. The Dura Ace stem on her bike can not be raised high enough. The amount of drop she has now is way more than most could tolerate. Take this opportunity to improve her bicycle. I recommend finding a fitter with an adjustable fitting bicycle that can find what position works best for her now and will for the next 10 years. And once you know her position you can find the frame that matches that position and will work best for her now and in the future. It will be a challenge but a good challenge.

The Lynski brothers that started Litespeed sold the business and waited 5 years until they could start their own ti frame business again. I wouldn't waste any time, emotional effort or money trying to fix her old frame. If for some reason you went that route I would recommend sending it to the ti business the Lynski brothers now own. But why waste the money on something that isn't optimum anymore? I can tell you there are real complications to making a frame for small women. I don't want to get into the weeds on solutions if that isn't the route you want to go. If Cycling is important to her, get what works best.