IN PRECISELY the same boat with Rachael.
It just does not work.
We need the EXACT secret sauce. Perhaps the Dev can tell us EXACTLY what to do... even WITH walk through, it just tells me what everything is worth, not what to do.
I promise you it does work. Either you haven't met all the prerequisites, or you aren't using the right actions. At the start of the punishment it will tell you if the girl is ready to level up. If she is, switch to easy mode under preferences and the game will walk you through the right steps. If she isn't ready to level then see what the hint says to do next, or check the quest log.