I think that Young knew that her daughter did not intentionally set the fire, what she meant by saying it was worse is that if Mary had been an evil person she could have blown off her daughter and it would have been easier to understand why this tragedy occurred, but because the fire happened due to one senseless act, not out of malice, it made it harder for her to handle the consequences her daughter would have to face and that she would have to take responsibility.
She knew that if Mary did not come clean it would ultimately eat away at her daughter's soul and she would not be able to live with herself.