This plot is begining to tear at the seams. Precognition is a stupid ability that requires a very strict set of logical rules in order to function within a narrative, and author-san has defined literally nothing about the ability.
There is another factor to consider that limits the efficiency of such an ability.
The intelligence and imagination of the user. Add to this ethics and psychological flaws and you can end with serious blind spots in your precognitive exploration.
I compared this to Dr Strange using the Time Stone: you can explore millions of possible futures, but those are only the ones based on actions you can think of. The user's imagination (which means the author's, really) is a strong limiting factor even if the ability itself has little to no limitation.
That said, I agree with you that there were many courses of action she could have taken, even with limited political power or imagination. The only reason things turned out without casualties... other than the "diplomats"... is because Seika is actually more powerful than she even imagined. Mass resurrection and material restoration, Seika just erased all the traces of his little angry rampage. (Except the memories of the participants, apparently, since the resurrected victims were shown to question the events. They remember, they just don't get why they're alive.)
But I think that what breaks the story is not her power, as badly implemented as it was. It's the whole reasoning that, on the one hand, the hero and demon lord are irrelevant, negligible factors in war but, on the other hand, they must be eliminated because they can break the balance between the two realms. And the whole related reasoning that the hero is too weak to be a major factor in a war when left alone, but also a threat that must be eliminated... which could and likely would paradoxically make her grow into the threat that the demons and humans both fear. And the fact that the whole conspiracy was setup before even identifying the demon lord, which is the most important factor of all.
Basically, it's the insane contrast between
thinking of the hero and demon lord as negligible variables and
acting as if they were the most significant entities in the world.
Compared to this crazy broken background, the little princess' predictive ability is just a slightly underused/misused story point.