It's a little of both.

The CO rep is wrong - your CO miles are good for more that what comes up on the CO website, because not all Skyteam partner flights come up on CO's site. However it is possible that all NW flights with award availability for CO do come up on CO's site, though I believe they can search for others.

You're wrong in thinking it's a convertible currency (ignoring the very lossy conversions by going through contortions and outside programs). You can't turn CO miles into NW miles nor vice versa.

Also, regardless of what Skyteam or other CO partner airline you get a free ticket on from CO, all CO miles you redeem are being redeemed through Continental, according the rules of CO's OnePass program, for flights ticketed by Continental. The OnePass program doesn't necessarily have the flexibility to mix and match the way NW's program does. If you saw a 47.5K reward on nwa.com, that was probably 1/2 of a 45000 mile First Class reward at the lower "PerkSaver" rate for one way, plus 1/2 of a 50000 mile Coach reward at the higher "PerkPass" rate. 22500+25000=47500 for the flight. I don't believe that Continental's program does this - though I could be wrong. In any event, just because NW had those flights available to its own members doesn't mean that CO had any availability left to those same flights.

I once had a converse situation - my wife and I were trying to fly on NW. At the time I had about 25,000 miles on CO and around 30,000 on NW, so we were trying to get the same NW flights from two different programs. I was able to get the NW flight with my CO OnePass miles but unable to get the very same NW-operated NW-coded flight from NW.