To me, the "major issue" is the damaged car.

The fuel thing is minor - in fact, some neighborhood rental agencies (Hertz and otherwise) send cars out less than full as part of their regular procedure. As long as they're honest about it, no big deal. Like I said before, at Hertz neighborhood locations, they sometimes do it as an exception, but in the end they make sure it errs slightly in my favor if anything.

The Jetta upgrade thing is minor. My hunch is that Hertz does consider it a midsize car, but since it's rarer at Hertz than a Corolla and has a little bit more horsepower (when it's running properly, anyway ), the employee may have been trying to say "Here's a cool car for you." Yeah, cool car before it was wrecked...