I do think your guest is a very articulate and intelligent individual Bipto. There is just an E-quotient missing in her view of witness accounts. I think most of the ill feelings that develop between witnesses and their accounts and skeptics is the fact they have very different goals. Science wants, as it were, to use the personal account as a step towards proof, but can't or won't. The witness usually has no goal along those lines, as he/she has already arrived at a very satisfactory level of personal proof. This public v. personal proof collision fuels a lot of the misunderstanding. It is not helped by how someone is likely to resent having their sensory experience chalked up to hallucination, as she apparently does.
And there is this too: You asked (to paraphrase)...What is the harm if someone chooses to believe in something that doesn't exist? (Great question, BTW). She could only toss out some lame examples of how govt. resources would be wasted (Yeah, THAT never happens otherwise,right?) or misguiding your children. What her failure to articulate anything really detrimental tells me is there is a resentment at work there. The source of that resentment, I believe, is the idea that somebody may be having an experience she and her chosen discipline can't share in. What else is there left to do but tell everyone else they are not having as much fun as they think they are? Very parental and so not useful.