But, at minimum, you will at least be able to get it on her credit report, which will be at least a consequence, and it will be a warning to the next landlord not to take her.  

At least they will provide a consequence and something on her credit report.  

A doctor may happily write a letter, but as soon as they understand there could be legal consequences for them misrepresenting the medical need, they may not sign the form.

(2)  Assuming I am correct about the occupant, what the possible consequences for me choosing to ignore this situation?

B has dogs, a recent break up (and consequently unstable life) and to top it all has experience as a landlord.

The phrase "this is a business" and "training your tenant" come up alot in discussions like this.There is a distinction between what that means said to a tenant and what that means when said to a business partner or peer.You want your tenant to understand that phrase to mean they should pay what is due, when it is due or suffer the consequences stipulated in the contract.

Failure to abide by those rules result in consequences.

Among all the other issues involved in this (emotional, legal, practical, spiritual), there are also has tax consequences for both of you.

Which will be a lovely consequence.  

It does bother me; it's just a question of how bad will the consequences be if I don't do anything.