This is the sort of issue that's been happening in country music since the 20's and 30's when AP Carter went around collecting lyrics and copyrighting the songs.
Most of Hedy's lyrics are floating lyrics found in other songs (or versions of this song). Her version constitutes an arrangement of the song. You can play the same song with some of the same lyrics without giving her credit as long as they are found in other versions of the same song. If you use her exact lyrics, you are using her arrangement and she should get credit for it.
I strongly disagree that any artist can copyright "every" version of a traditional song just because they were the first to copyright it.