skywalker - everyone know's a manufacturers recommend size for a given height is a very rough guestimate as an aid to get a ball park figure. They're a starting point as it were.
In a shop, you always size "safely", it's always safer to size a little larger than smaller. I too work in a bike shop.
You need to consider riding style, rider preferences, terrain amongst many other factors when sizing for a MTB (road is different, you're only trying to attain maximum padalling efficiency position). With MTB sizing you're trying your best to juggle compromises.
When you're sizing well in a shop, you spend quite a while getting your best feel for what the customer actually wants and which compromises can and can't be made.
From what i can make out from the OP, their priorities are out of the saddle handling, they felt the 16" was nimble and chuckale enough, they have BMX roots, so favour a nimble bike. The size charts will be based on in the saddle efficiency and the fact the orange five is marketed as an all day, "do it all" trail bike, so will be sized to be comfy in the saddle. Plus if you size a trail bike larger, it will feel more confident in the rough and at high speed, giving that tangible "better performance" as it were, i say "better performance" because if you give someone the ability to feel like they can go faster, they will lap it up.
My gut instinct from doing this as a job is that a 16" will suit the OPs desirables very well and the fact that a eff tt of 582 really isn't short in the grand scheme of things.
Also I feel, this is only my opinion, MTB sizing is too used to the days of 100mm+ stems giving lots of room in the front, so is too hung up on replicating this feeling of "space". People are used to this "space" so if they don't have this space in something they try, it doesn't feel immediately right so don't give it a chance.
