The problem with your right leg is one of the most common problems in dancing. It means you are both not in correct dance position. It has nothing to do with height or height difference. Volumes have been written concerning correct dance position so I won't even try to explain how to correct this. Explain the problem to your coach/teacher and if the correction consists of moving the lady to your side so that you are right hip to right hip, change to another teacher. My partner and I have spent more lessons on correcting our dance position than I can count. We are always working on this. It is the key to leading and, I feel the most important aspect of dancing.
I agree with David that (1) Yes, it is possible to dance in a partnership of considerable height difference, and (2) It does create special circumstances that make it more difficult. Not impossible, but difficult. Flaws in technique are more obvious, so you have to be twice as perfect as everone else.
However, I don't agree that reaching is the skill your lady needs to improve in order to dance with you. No matter how much she reaches her leg out of your way, her body will still be in your way unless she moves it. This is the job of the standing leg.
In all likelihood, she will need to work on keeping her center picked up as she moves back through strong support from the front leg. She'll also need to work on continuing the movement of the center back past mid-stride, without dropping, through the controlled and gradual lowering of the back heel and leg. If her center drops at the beginning of the walk, you'll find that your leg has nowhere to go. If it drops after mid-stride, you'll have trouble with your knee bumping into (forgive my bluntness) her crotch.
I don't mean to sound discouraging, but the truth is, you will need to work a little bit harder than everyone else. The good news is, you'll both be better dancers as a result.
I am 176cm (>5'9" for the SI challenged) and one of my ex-partner was 164cm(5'4"). We had the problem Jonathan described towards the end of his message for the first year. After that we managed the difference really well and competed successfully and reached the open (5 dance level.) She is dancing now with a guy taller than me.
I think however that not the full height is the most important thing but the length of the legs. So if your partner happens to have longer than average legs the might help. The arm hold will be no (big) problem if you can move your center together.
I warn you though: there is a danger in starting assessing your partner and your bodytype to see how you fit, and further noticing flaws (arm, leg, neck length etc). It is not healthy for a romantic relationship in case you happen to have that with your partner.
[start offtopic rant]
Since I dance, I noticed that I am bow legged, my spin is curved to the side in my upper back, my head is poked forward, that I cannot fully extend my leg (that is not to 180 degrees but only to say 175) my hair is unfit for the competition hair style. And my partner once said that my butt looks big, and I tell you that it is smaller than the slimmest 10% of the population has.
To be honest I fixed my poked head and improved my leg straightness (which mainly comes from muscle tightness), and I noticed that my butt (which is just muscle) looks smaller if I stretch well.
Derek, The Pilipenchuks of Baltimore, MD have a great height difference. I don't know his height but she is exactly the same height as my partner, 5'-3" without shoes. He is, I would guess over 6'-4". My partner has purchased two of her gowns in the last year so we have an idea of what to do to the costume to make the lady seem to be tall. The physical aspects are more difficult as the lady must really reach to make the partnership work. I have taken coaching from Polina and know that her arm length is the same as my partner. I hope this answers some of your questions, just consider it another challenge, particularly if she is a good partner in other respects.
What about a height difference in which the lady is several inches taller than her partner?
I have had this issue come up and was wondering if there is a best approach or strategy.
Underarm turns, among a host of other issues, seem to be painful, if not excrutiating, especially on the knees.
Despite her efforts to maintain frame, which works so effectively with other partners (who are as tall or taller than herself), she is almost always off balance with the shorter partner.
Can this height difference cause this? For her, it feels like his center of gravity which is much closer to the floor than hers acts more like a pulley system, battering ram or wrecking ball than a guide.
She feels like a tall wobbly structure which has been bumped, twisted and torked from below by a relentless bulldozer!