Princess Birthday Dress

I don't think I talked about this at all, which is strange, because it's kind of a big deal. I made a princess dress for my birthday! (I'll see if I can find the pictures.)

I decided since I've never had a princess birthday party before, I was going to have one for my Golden Birthday.*  So I set out to make myself a dress for the occasion. It's teal and purple and I had lots of input from Puese on the matter. (Mostly because I forced him to give it.) I also made a petticoat for it, but didn't finish it prior to my birthday. I did however, have a tiara and Puese gave me a set of pearls for my birthday.
It was lovely. It was beautiful. It was not perfect.

My dress on my birthday. Puese is a horrid photographer.
This was the best of them all. That's as far as I can lift my arm too.

I ordered a corset for underneath it so that I wouldn't have to wear a bra, but the corset I got squished my breasts into my throat. That didn't work for me, so we adjusted it as much as we could so the body of it was fitted, but the top was let out a bit. Regardless, it didn't actually work with the dress, and it makes the fitted bodice of the dress look funny. After the fact of the day, I found that one of my bras works well with the dress and you can't see the straps.
Then there was the strange phenomena that was me not lifting my arms up. I'm not sure how to fix this since I did the entirety of the sleeve before attaching it to the dress, and the sleeve fit fine, the dress fit fine, but the armhole doesn't allow for much movement between the two.

FASTFORWARD to today; I went to add a gusset  to the armpit of the dress, but after I let out the underarm seam I realized that that was not the issue either. The problem is in the front of the shoulder. How am I supposed to fix that? I suppose I could take the sleeve off completely and do my best to stitch as far into the seam allowance on the sleeve side as humanly possible. But the fabric frays easily, so there's not a whole lot of seam allowance left to work with. I'm not sure what to do at this point, I don't want to take too much apart until I KNOW what I'm going to do, and flouncing around in a dress with armpit vents is not a pretty picture.

Has anyone else had to deal with this? Does anyone have any suggestions on how to fix it?