Yes, she was in it. In the new Christmas Story, Melinda Dillon's performance was quite notable. She played her part with grace and skill, helping to create the warm and festive atmosphere that is characteristic of Christmas stories. Her acting was one of the elements that made the new version of the story engaging and enjoyable for the audience.
There could be various reasons. Maybe she was not available during the casting or filming period. It could also be that the director had a different vision for the characters and chose other actors instead.