Yeah, anabel! Great explanation.
I'd like to add that riding with shorter reins is not restrictive IF your hand and arm softly follows and you release over fences. Looks like you're in a transition phase in your riding; that you used to ride with long or loose reins and just plant your hands at the withers to release, and that your instructor is trying to transition you to the next level.
As Anabel mentioned, getting your elbow working properly is key. I'd also have your instructor put a rubber band, yarn, tape or some kind of marker where she wants your hands to be normally, and where she wants them to do for your release over fences.