No, winning by 50+ points isn't any better than losing by 50+ points. Either way, it's in no-one's best interests - neither the winning nor losing teams gain much, and both are less likely to keep playing than they would if they were regularly playing close games.
"In the Know" is correct in that the rule currently allows for 9 year olds to play Under 10s, if they don't turn 10 before the end of the season. This exception to the standard age groupings has been in place for some time now, but most clubs have ignored it, and instead opted to follow the same rules in every age group. I am led to believe that the exception will be abolished at the end of this (Summer) season, after which time the players concerned will be forced to play in Under 12s.
I would hope that when Woodville made the decision to play this team in Under 10s, they didn't anticipate that the team would dominate the competition, and that it wasn't a case of "these girls have been thrashed for a while, so now it's time for them to do some thrashing of their own". I'm sure that the team could have found more appropriate competition in one of the Under 12 divisions.