If it ain't broke, don't fix it. If your vet said that surgery was not a wise option, don't do it. It's always possible to get a second opinion if you really don't feel comfortable with your vet's diagnosis, but, honestly, you should write up a list of the questions you just gave us and give them to your vet to discuss. He knows your pup best and he's the one with years of medical training behind him

How old is your Bichon? It sounds like she's getting some arthritis, but you can never be too sure because Bichons are highly susceptible to luxating patellas and even hip dysplasia. However, because your vet did not recommend any kind of operation, I'm going to guess your pup is just getting arthritic. If your pup is indeed arthritic, most will recommend supplementing her diet with glucosamine, chondroitin, MSM and the like. I don't know if there are any differences between human supplements and dog supplements besides the dosage, so that might be an option (dog supplements are awfully expensive).