I don’t think the issue is too close to home. I think you and your D need to agree on ground rules which aren’t personalized (i.e. not THIS friend, any friend). Her academics come first, obeying the dorm’s security rules are critical (do you want your D seeing strangers in the bathroom every night- no? Well, the other students parents feel the same way), understanding that paying for a single is a privilege that not everyone can afford so it’s important she doesn’t abuse the privilege by using her room as a hotel.
These hometown friendships tend to fizzle out pretty quickly but I agree that jumping into college life with both feet is important early on. Maybe agree that your D will wait until homecoming weekend/Fall weekend (whatever they call it) before either coming home or having guests from home? That gives her 6 weeks or so to get acclimated…