It would’ve been even better if Oswin was an actual Dalek squid thingy. I don’t know just the fact that she still looked human inside the Dalek softened the blow a lot for me.
I’m pretty sure that was just her image of herself we were seeing. She wasn’t ACTUALLY a tiny sassy brunette in a cute red dress running around the insides of a Dalek. The Doctor said she was fully converted (as in she actual was a Dalek squid thingy inside). But because her character was convinced she was still human, we the audience needed to see her as human.
