I say get the better bike, as long as she will be able to grow into it. Plus, you can always sell it if it's higher quality...so maybe you'll pay $70 for it now, she outgrows it in two years, you sell it for $25 or something. Then you've spent about $50 on a quality machine that you used for two years.

I also don't think she is too young...would DH think she was too young if she was a boy? I only ask b/c I seem to remember my mom wanting to buy me a whittling tool when I was in the 3rd or 4th grade (I liked to work with my hands). The salesperson, when he found out I was a girl, said I was "too young." Nice, right?!! But hopefully DH is more progressive than that! Get your kids into physical fitness early on, by any means neccessary!