Help me fit a 5'4" female

[Eden]

As I have seen a few recommendations for a 48cm, my questions are this:

What top tube length do I need to focus on?

Would a square geometry frame (48 seat tube and 48 top tube) be the right way to go, or should I try and find something a bit shorter, like a 47cm or even 46cm?

I don't think a 48cm seat tube/top tube combo exists. I'm 5' even with a around a 29" inseam - I ride a 44cm frame with 700c wheels and a 47cm with 650c wheels. Neither of my top tubes are as short as 48cm - a top tube that short is very very difficult to find without going to a bike like a Terry with asymetrical wheels 700c on the back and 24" on the front.

Do I need to be looking for 650c wheels for a frame this small to have good handling?

I don't honestly notice any big difference in handling or cornering between my bikes. I have a cf Specialized Ruby pro with 700c wheels and a ti TiCycles Hyak with 650 wheels. Neither feels twitchy or sluggish to me. As well as being short I have very small feet so I have no toe overlap problems no matter which bike/wheels I'm riding, but if the person you are looking at bikes for has normal sized feet then it could be a problem with larger wheels.

Due to her budget, I am looking at $400 to maybe $500 range. I would like to go used to get her a little better group (105 if I am lucky), etc, since Sora at $400 - $500 is about impossible these days.

Again, this is a huge help for me, so thank you all for your input!

That's a pretty rough budget... small bikes can be kind of hard to come by used. Though if you are in the Seattle area I'm about to put a 44cm Fuji with 105 on the market in that price range.....