I'll bet lots of us have stories about GPA weighting rules. I transferred into my high school in junior year, and the school did not transfer my prior Honors classes at A=5. So I was salutatorian, not valedictorian, despite higher (actual) grades and harder classes than the valedictorian. Eh.
So, unfairness is just out there, as it is in any rule system.
Keep in mind, though, that the vagaries of weighting are well-known to college admissions officers, who often compute an UNweighted GPA as well. Class rank, too, is such an imperfect indicator: hard to know what it means without knowing the other kids. So I wouldn't worry too too much.
I suspect you're right that the "plus" from her music enrollment and higher course load will outweigh the lower weighted GPA.
