If you do not show you are being proactive an attorney suing in court will say you did nothing after the first incident happened and then something else happened and you the landlord are negligent for not acting appropriately.No legal advice.

Our cost will far exceed the deposit but am not sure what all she is liable for and I assume going after her for more could backfire in court once they get into life of carpet, wear and tear, etc.

(It's your Butt when things go wrong).Housing Court Judge will be speaking at our REIA in September, link below.

and will it hold up in court?

If you do move in, no harm no foul, but if you don't and there is an investigation you pretty much shot yourself in the foot by indirectly declaring your intention in your question.

If your contract is contrary to state law the courts could simply deny that part as unconscionable.

Once I serve eviction court notices, I don't accept partial payments unless they show up to court with a substantial payment.  

She sent the court ruling, but it does not show an end date anywhere. 2.

If you end up in court, it could cost you a lot of money whether you win or lose.

And the courts favoring the tenants does not help you.Don't want to alarm you.