So, what is your friend's question?
Should she be upset because he danced near someone in a public place where dancing does take place.
Is she upset because he didn't walk away from the dance floor, or is she upset because they were at this place that give people a chance to do just that... dance.
Is she upset because she asked a very insecure question?. A girl who is sure of her boyfriend and his feelings for her, should never put him in the spot and ask 'is she prettier than me? " That is childish. I think the answer he gave was good - because it was the absolute truth.
If she does not like to be confronted with 'eventualities' in public, she should not place herself in the precarious position.
The only things possible here are:
a) get rid of him if she can't trust him
b) stay at home when he goes out (that will make her think of worse scenarios, but that's her problem)
c) stay at home with him and think of something fun to do there (a movie, dinner, good sex, etc)
d) lock him up and never let him out
You've been in her shoes yourself a few times, so what would you suggest.
Lots of luck, flower, and I hope you can help her.
Setting oneself up for a fall is self-destruction and self-doubt.