First, take responsibility for putting the wrong address in your Paypal address. Correct it now. If it was a transcription error by the seller handwriting an address, rather than printing a label through PP, the error is hers, not yours.
Second, take responsiblity for picking up the package instead of making a complete stranger go out of her way to drop it off. Phone her and make arrangements to go to her.
There was no reason to inform PP of the possible solution to the problem until it was solved, but you may be able to re-open the case by going to the PAYPAL Customer Service and explaining the problem.
Do this only after you have gone to pick up the parcel, and been sent away empty handed, of course.
If the parcel never reaches you, and PP is not helpful, you can go to the 1-800 number on the credit card you paid with, processed by Paypal, and ask about a chargeback.