You're right about the bills; chances are, they aren't worth more than 15-20% over face value unless they are star notes, or a series that is worth more than usual.
However, it is perfectly legal, and is actually very common to melt US coinage. During the silver boom in the late 1970's, many Ben Franklin halves, Washington quarters, and even common-date Morgan dollars were melted for their silver.
Also, it is not illegal to deface either US currency or US coinage, unless it is done with fraudulent intent; i.e. if you try to alter the date to make it look like a rare coin, etc.
Chances are the stash that she found might be worth around 5K, but definitely not much more than that, unless there are some extreme rarities involved.
Sorry about hte triple post; my computer was being unusually slow, and I wasn't sure if it got the message.