I didn't get from the her comment (the one you related) that she doesn't think you're all that smart or competent. Could it be more of a projection of your thinking?

I get the sense she doesn't want you to dwell on the grades issue because that would be feeding into the pressure you're putting on yourself.

It sounds more like she's challenging you to change in other ways, ways that will help you in life, not just academics. That's my take, anyway.