I think the huge Gollum is a very understandable misinterpretation, but I think it's likely false the text she worked from was ambiguous about Gollum's size.
If she was working from the 1951 revision, which seems likely if she was working in the 60s, then there is an explicit cue in the text showing that Gollum must be roughly Bilbo's size, when Bilbo is escaping the caves:
> Straight over Gollum’s head he jumped, seven feet forward and three in the air...
If Bilbo could jump over Gollum with a three-foot leap, Gollum cannot be a giant.
That said, it's well after the passage she illustrated, and would require a pretty attentive reader to catch, so as I said, the mistake is certainly understandable.
Additional caveat that I've not read the second edition of The Hobbit, only more recent ones, so it's conceivable that passage wasn't _exactly_ as I've quoted it.
I strongly suspect was largely as written, however, and even without the explicit numbers, if Bilbo jumps over Gollum, the inference remains largely the same.