I'm also 5'2" with a 28" inseam (barefoot), so I have a short reach. For me (and probably for you) the smallest stock bikes are usually just too big. I wonder if part of what's holding you back may be due to bike fit. Have you ever gotten a bike fit, where the fitter spends an hour or more watching you riding the bike on a trainer and adjusts the seat position, stem, handlebars, etc.? For women our size it's definitely worth it since most stock bikes are just too big. Also, some PTs who specialize in bike fits take insurance, so it may only cost you $25-50 rather than $100-150+.
I bought and rode three different road bikes (aluminum, steel, and carbon) that all turned out to be too big for me. The first was a Kona Lisa RD aluminum bike (510 mm effective top tube), which has a similar geometry as the Specialized Dolce, but I was never very comfortable and always anxious on that bike. I thought it was because road bikes just aren't as comfortable and easy to ride as hybrid and mountain bikes, but then I test rode a Bianchi steel bike (also 510 mm ETT), which was a revelation. It was so much fun to ride, more comfortable since the steel frame absorbed road noise better than aluminum, and once the LBS swapped the stem for a 70 mm stem and the right width handlebars, I bought it and really enjoyed riding it. I finally felt like I was in control of the bike rather than at its mercy. I realized the Kona was just way too big for me, so I put it on craigslist the next day.
With the steel bike I started riding more and doing longer rides, eventually doing a 100 km ride with DH. I would get frustrated, though, because he rode 10x more and was much stronger, and although he was incredibly patient and would usually let me set the pace. Still, he was on a light carbon bike while I was on my heavy steel bike, so I couldn't go as fast, had to work harder, and would get tired faster. All of this became evident when we did a particularly hilly 100 km ride when I'd only been riding about 6 months. I just wasn't very strong or very good at climbing, and that ride was so hard for me, I ended up sobbing.
I spent the next few months researching carbon bikes and test rode 5-6 of them (e.g., Specialized Ruby 44, Ridley, Giant, etc.). I did hilly test rides, and while I could tell it was easier to climb the hills on the carbon bikes than my steel bike, they just didn't feel quite right. One day I test rode an XS Wilier Izoard XP (515 ETT), and it was amazing! I could climb more easily and ride faster on the flats, and the bike was so stable, I could descend confidently. I was grinning during that entire test ride. Needless to say, I bought the Wilier. (For some reason I really like the ride on Italian bikes.) BTW I never test rode a Cannondale when I was bike shopping, but I've since ridden the Cannondale Synapse 44 (491 ETT) carbon bike when I took a friend bike shopping. It's really nice and responsive, and if they'd had one in my size when I was shopping for carbon bikes, I might have gotten it.
So to answer your original question, "How much of a difference does a bike upgrade actually make?" It makes a HUGE difference if you upgrade frame material and components and the bike fits. And you should be able to feel the difference, but only if you do a long enough test ride to feel the difference on climbs and descents and long flats. There's no way you'd be able to really know how well a bike fits and handles just by riding around a parking lot. You might be able to tell a bike is way too big or way too small just by doing a parking lot test ride, but there's no way to tell its responsiveness (i.e., has a stiff BB, so you accelerate faster and climb more easily) unless you do at least a 15-30 minute test ride where there are hills and some straightaways where you can punch it. If you're looking at carbon bikes, I can't imagine the LBS not letting you take the bikes out for longer test rides.
Fast forward almost three years, and I've since traded in the Wilier for a Colnago CLD 40s (500 ETT), the smallest available WSD carbon bike in 2013. I rode the Wilier more than my steel bike and could definitely finally feel myself getting stronger and faster, but once I started consistently riding over 50+ miles, I started getting knee pain that turned out to be IT Band Syndrome. My PT gave me exercises to address the ITBS, but she was convinced my bike was just too big for me. The wear marks on my saddle showed I was clearly dropping a hip to compensate for the reach, putting strain on my knee. I didn't want to believe it since it meant I'd have to get yet another bike. I just kept riding, but the harder I rode the worse the pain got. Once the pain got to the point I couldn't even ride, I finally realized she was right. I did more research on carbon bikes and found the smallest non-custom bike with the shortest top tube and reach was the Colnago CLD 40s. I had my LBS order one and sold the Wilier on craigslist. Within a month of me getting the Colnago, I did a century ride and the 180+ mile RSVP (Seattle to Vancouver) ride, and I knew it was perfect! I continually get stronger and faster riding this bike, and I've been riding pain-free and injury-free ever since.



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