putting 650c wheels on a 700c frame is the worst idea ever. (well maybe not, i've seen worse on this board)

1. you're lowering your BB by over 3cm (can you say pedal strike?)
2. your brakes won't reach (tektro R556's might save you here, but probably not. Drop bolts are more likely)
3. putting smaller wheels won't change her riding position at all. (well she'll be closer to the ground, but that's about it)

If you want her to be more upright get a shorter stem with more rise, and some risers or swept back bars (moustache/albatross/priest/noah's arc.....)