They are offering you a discount because they don't want to do any more work to make up for their mistake. It's cheaper for them to adjust the order. The value of their Cost of Goods is tied up in the Filter and pump, and you've already purchased that. The margin on the pool walls and PVC piping is huge. Put another way, that extra 4 feet in length amounts to roughly 20% of volume of your pool. That's quite a bit, IYAM.
1) I think bigger is better.
1a) I think you do too, considering you purchased the bigger pool to begin with.
2) Don't let the manufacturer off the hook.
3) I would actually send back the pool, request that they cover return shipping AND ask for a discount for your inconvenience. The Summer Solstice is in 2 days. You are losing prime swimming season!!!