I just built an old centurion mixte up for my girlfriend (5' 0") and it sure beats the old schwinn varsity step-through she was riding. It still looks a little odd with the 27" wheels, but it fits, and that's what's important. I smaller mountain bike with narrower slicks may be a good alternative too.
Having lived in the great lakes region while I was a college student and bike co-op mechanic, I think an internally-geared system (or single-speed even) would be ideal. A full school schedule makes it more difficult to keep up on drive train maintenance, especially during the salty, snowy winter.