No, you can pick whatever choice you want, the game won't judge you - although Catherine sure will.
There is no middle ground option. It's a matter of deciding what your priority is: Would you rather point out the hypocrisy of the woman you don't like, or decide that whatever her attitude, she does have a point. Which matters more to you? If you'd rather have the satisfaction of putting her in her place, do it. It will change her character arc, possibly for the better, even.
I turned down one of her later requests and her response next turn left me thinking I had done the right thing.
Conversely, for one of Edmund's quests, I did what I thought would be the wrong thing, and it had a result that surprisingly seemed to be the right thing.
