I'm thinkin' there's little doubt the controller saved her assets.
Do controllers have a "bible" for dealing with lost/panicing students? There's obviously a fine line to walk with an unstable driver and it's gotta be difficult when all one does is set in a dark room and talk to people that they never see. All that said, at one point the controller was asking the student to identify the airport low and right from a Cherokee. I'm thinkin' that was a non-starter. Put the airport on the student pilot's left and they're much more likely to see it IMNSHO.
Again the controller did a heck-of-a-good job dealing with something that he really shouldn't of had to deal with. Maybe a little orientation on how small aircraft drivers look out the window would've helped a little in this situation.