I can tell you that you won't secure a REFI term longer than the term that is left on your lease. 

Can I use her security deposit to cover these legal fees I've incurred due to her not moving out?

Do nothing...the tenant isn't renting that area and has no right to dictate how you use it as long as it poses no security/safety risk to them. 

Section 8 tenants are another way to secure rent payment with government backing.The Midwest is a solid market for rent growth, cashflow, and decent appreciation.Look at a market like Lansing, MI.

While I'm not entirely discouraged, I feel like I've invested significant resources (LLC, website, domain) without securing a deal that generates cash flow.Any advice or guidance would be greatly appreciated. 

Sometimes it’s the smartest move to gain liquidity and to secure your position with your remaining properties.

Building out my portfolio with strategic, secure passively cash-flowing assets to continue to build leveraged equity.

I’m curious, what’s been the biggest hurdle for you when it comes to securing funding for your real estate projects?

Well there's a reason they screen their borrowers, secure their loans with a first position trust deed/mortgage and charge a small fortune to make such a loan.

You may or may not wish to fix it since its likely too late to charge the last tenant's security deposit for it and also that it sounds so minor that people didn't even notice it right away.