Totally agree with making a contract first that covers ALL of the rights, including the proof scans. Then the ball is back in your friend's court, and they have to decide whether they wish to pay you well or not.

I also agree with telling her the truth. Don't lie. Don't make anything up. Just the truth. Tell her straight that you would love for her to have an album of pictures, but that the proof scans are not meant for this; they are meant for viewing on a screen.
Tell her that to meet and preserve your quality standards, you have to make higher resolution scans that are color corrected and worked over which costs money and more of your time. Good luck!