Clever ideas, but they appear to be aimed at a man. CMCG is, if I recall, a woman.
CMCG, I’m a bit confused about how good a friend this is. I certainly don’t have any friends that come by five times a week. My wife has one or two that might come by that often, but they are easily good enough friends that she can laugh off a gift that she doesn’t want. What she would do is kind of make a joke about it in a merry way. Keep smiling and laughing and joking while gently placing said gift in a location such that the friend knows she’ll never see it displayed again. If you keep it light, there might not be so much tension and your non-display of her gift might not cause such a rift.
In any case, a friend that gets “very hurt” and “angry” if you alter a gift she gave you seems pretty self-centered to me. Not to mention fragile and needy.