I think it means you need to raise the seat UP more, not move it back.
You can't have 700c wheels on a really small frame because then your toes hit the front wheel too often when you're turning or cranking up steep hills...the dreaded "toe clip" syndrome. 26" or 650B wheels will not make you slower- they'll just be better proportioned for your frame's size and your body size. Better fit will result in more efficient riding. I suspect that any women who is 5'3" or less might be better off on a bike with wheels smaller than 700's.