If you have already been practicing at 3'6 as long as it's going well I would say go over a few more at that height and go for the better ring
I would stay in the ring with the better footing. It's better to come home with a sound horse then a two dollar ribbon. If your horse was younger I'd say you probably would be fine if you're careful but you obviously don't want to risk it with your horse.
It really depends on your horse but the footing also plays big part. Even my younger horse moves worse at bad footings
It depends on how confident both of you are jumping a bigger class, and if it's not too much for her to jump. Or look if there is another venue with better footing.
I just don't want to risk injuring my horse because she is getting older and her health is important to me. I could show her in the better ring but bigger height or worse ring but smaller.