That is so odd they didn’t ask about the dog. We allow pets but everyone that has brought pets has asked before booking, especially regarding leaving them alone, etc. and just to make sure it is allowed.
You are right to stick to your policy in this case. We are in Colorado, and had tons of inquiries and questions for the holiday season, but just got a booking. You may not get rebooked.
I am unsure why some are giving you a hard time. You could get another booking and keep the 900. But you are offering to refund which is above and beyond in my opinion.
Those 2 days she blocked your place and kept anyone else from booking may have cost you a longer booking if other potential guests looked for a place during that timeframe.
I think single rooms are much easier to be flexible on depending on the circumstance. I generally will refund a 50 dollar room if a mistake was made. If I am renting out my whole house, no way am I just going to refund 900 dollars with no replacement booking. We do rent our whole house also and luckily no one has cancelled yet. But if that happens, I am also sticking to my policy.