Have you actually registered a FS1 test with ISI? Because if you haven't, you can always compete lower than that. The level of CLASS you take isn't the same as the level you compete in (in fact, you are generally always one class higher than you compete, and some students move on in group classes before they can pass the level due to a single skills, so they might be a few levels ahead.)
If you don't jump or spin- go for artistic. I have no doubt YOU can be a character. Heck- you could even make it an ice dance.
I have never been, but we have a contingent from our rink that goes. This includes a woman who is an aspiring freestyle skater, she has a basic 1 foot spin, but not a scratch spin, and can do a bit of a waltz jump. She told me she skated in 15 events at World's (fewer at adult nats, because at World's she does programs with her granddaughter.)
I know for World's the ISI coach at our rink has every parent going put on skates for "family" numbers, one grandpa even brought a walker out on the ice, because he could barely march- so your coach is telling the truth when she says it is people of ALL levels. If you'd have fun putting on a costume and skating a program, DO IT! Especially if you are going to be there anyway- might as well do some skating!
Edit to add:
I don't think the current year entry forms are out yet, but I found 2010's. For low level dancers, they have a progressive event (if you are in Dance 1) and swing roll event (if you are in Dance 2)! Or you can do the Dutch Waltz. You can do solo, skate with another woman, have a pro partner, a traditional partner, etc. ISI just wants you to skate
http://www.skateisi.com/site/contentPDF/Events/Adults/2011/Dance.pdfHere are the individual choices:
http://www.skateisi.com/site/contentPDF/Events/Adults/2011/Indiv.pdfYou would need to look at the rulebook, but there are lots of events you could do without jumps (though others may): spotlight, artistic, rhythmic, stroking (obviously), footwork (yep), and figures
Plus, you could always skate as part of a team in group events (not synchro, group numbers)