LOL! When I was a kid, writing on our skin was a HUUUGE no-no. Like, as bad as cussing no-no! My mom hated writing on skin; she thought it looked dirty, and if we did it we were punished.
I do not write on my own skin; I am a list-maker and always have pen and paper or at least my I-phone that I can make notes on. But as for my kids, I allow them to write on their skin. My youngest went through a stage where she loved Care Bears, so every day we would draw a different "belly badge" on her tummy and sometimes I would even add a little heart on her nose so she looked like a Care Bear. My 6 year old loves dressup, so sometimes she draws rings onto her fingers and watches and bracelets onto her arms. Yesterday I pulled out my paints and painted fake henna all over her hands and arms. My mom will still get upset if she sees the kids with ink on them, but I don't see the harm. (As long as it is not the day before picture day ;)
By the way, a while back, a few different mamas on this site mentioned that they write their phone number in permanent marker on their kids arms when they go somewhere busy, like a carnival or water park, so if the kiddo gets lost, their parents can be easily called. Cool idea!
And, lastly- that lady must be a nut! I am dying to know what you said to her!