Pikilily,
I think moleskins meant inherited in the general sense (which is what you understood too, like an animal with congenital or genetic disorder, you don't want to breed from them), but not inherited bacterial infections.
In my experience, although there's a few bugs that can be transmitted in utero, the infection develops much earlier (i.e. first few days of life of the lamb/calf), and even then the symptoms are mostly similar to something ascending the umbilical stump (like navel/joint ill), it is quite hard to differentiate between true congenital and acquired in the first few hours of life.
Reading your post, it seems odd that the joint hadn't been flushed before it erupted. It is an easy enough procedure and helps removing as much pus/bacteria from the joint from earlier on. By the time the joint erupted, I am fairly certain significant damage to the cartilage will have occurred and your ewe might or might not recover 100% motility in that joint. It all depends on the extent of the original damage, and how much inflammation is still there. This could lead to a condition called ankilosis of the joint, which per se isn't painful but it is a stiffening of the joint and it won't be able to bend as before. The ewe would still be lame, but not a painful lameness if that makes sense? Ankilosis is fusing of the bones in the joint, making it whole and not flexible and it is very likely to occur following cases like yours.
It is not inherited, so if you are confident your ewe is not (repeat,
not) in pain, you could try and breed from her, because she shouldn't get more problems than any other ewe with a more fortunate start in life.
Especially because you say she's bright and cheerful, and especially if she keeps eating well, I'd give her a chance like your vets said.
However, if the original septic joint was bacteriemic (bacteria in the blood stream) at any point, the bugs might have spread to other sites and, without you knowing, currently creating more damage elsewhere in her body. If she goes downhill again, or shows another swollen joint, I'd just get rid of her. At that point it's not fair anymore.
Hope it goes well though!