I would say that is rubbish! Reach is important but so is standover clearance on a mountain bike (more so than on a road bike) for the reason you describe. My first mountain bike was similar to what you describe seemed to fit well but had no standover clearance, which was fine for bimbling on the road or forestry fire road but not for technical riding. Landing on the top tube is not pleasant, even for a girl!

MTB cleats are recessed into the shoe so will do nothing to add extra clearance.

I'm 5ft 4 and the inital mountain bike frame was 17" with a 22.5" top tube ( I use it for commuting now and am more stretched on it than my real road bike), I now ride a 14 or 15" MTB with a 21.5" top tube that has decent standover, the difference is unbelievable.

If you have been riding road bikes for a long time you are probably used to being fairly stretched out (from your description it sounds like the MTB frame is too big for you), in general the MTB position is more upright (unless your XC racing). As a general rule I tell friends, male and female, who are buying an MTB to get the smallest frame they are comfortable with even if it means running a lot of seatpost out (I usually have about 9" out).

If you look at my Avatar picture you can probably get an idea how much clearance I have on my full-suss mtb, my hardtail is similar.