I say any woman over the age of 18 is fine. Weather somebody looks at a young girls in a sexual way or not is there personal buisness, but i most deffinately say it isn't proper and in no way should you have sex with them. As long as people are of legal age 18 or over and both parties agree to it then everything is cool.
I totally agree that she is overreacting to this, and yes masturbation is a normal part of life. i do it every day and I'm not the least bit ashamed. Maybe something has happened to this woman in her life that makes her feel this way.
You could also get a playpen and dress her up like a little girl. As long as they are of legal age and both parties agree go for it.