Catherine, I think the best thing to do for her safety and for the joy of your dives and the other people who dive with her is to pull her aside and let her know that she needs to work on her skills. You might even offer to help her with her skills if you're so inclined.
Just from what I've read of your description I would also ask her if she's on any medications. If she's not then work with her situation awareness and also ask her how she feels during the dives. Even though it's 40 feet she may be narced. Ask her to take a EANx class.
Also, if she's as bad as you say, I would have to ask who gave her an o/w c-card? She appears to be a liability for the instructor and possibily the shop she took her class through. I've only seen two students who my instructor was like "I just don't know if I can sign off on their car". In the end she ended up signing off on their course, but she spent allot of extra time with the students one-on-one.
In June I was on the Turks & Caico's Agressor II and ended up buddying up with a guy who hadn't been diving very long and had never dove in salt water before. He didn't have a buddy and I volunteered to buddy up with him. The first few dives he would come to me in 60fsw and show me his pressure gauge reading anywhere from 200-500 psi. I would constantly ask him what his pressure was and he would look at it and give me an OK sign. I did two OOG ascents with him. I wasn't going to let this guy ruin my vacation and ended up pulling him aside after a dive and explained to him that he wasn't only putting himself in danger, but putting myself in danger as a buddy and that he needed to let me know he was low on gas sooner in the dive. The guy was very understanding and did a complete 180 in how he dove and I took great joy in watching his skills improve greatly throughout the week. I would dive with him again anytime.