In reality, Ling Yu was completely guessing at Elder Yu’s powers.
Since General Luo was at the rank of a Martial General at the early stages and even he treated Elder Yu with respect, she had assumed that Elder Yu was surely stronger than him. However, since the top cultivator in Azure Dragon Country was a late stage Martial General, and Elder Yu did not share the position with him, she simply assumed that Elder Yu was weaker. This could only mean that this old fart was surely a middle stage Martial General, in her opinion.
What Ling Yu did not know was, since the Hundred Herb Hall did not belong to the Azure Dragon Country, Elder Yu would naturally not be in the ranks along with the expert cultivators within the Azure Dragon Country.