Cracked iPhone screen and internal damage

Hello,

I dropped my iPhone 6 from a couple of feet and it landed on gravel and it hit a stone, so even though I had an OtterBox on it, it got a small crack in the corner. Only a tiny part of the crack was actually on the screen.

I stupidly didn't buy AppleCare+ at the beginning, so I found the price for the screen replacement and took the phone to a local certified Apple repair place (it was listed on the Apple website as a service location, but it's not an Apple Store). They said they don't replace screens at that location, but that I could take it to an Apple Store.

There's no AppleStore near where I live, so I sent it in for repair through their online service and authorized the maximum out-of-warranty replacement amount for my credit card. The phone was working perfectly before I sent it in, and I was fully expecting the screen to be replaced for the $100 or so listed on the website.

They ended up sending me a replacement, and charged my credit card for the maximum amount! I'm very surprised, as the crack was very minor, and mostly off the screen (but nowhere near the front camera or speaker).

When I called Apple Support just now to inquire about it, they said that there is "internal damage" to the phone, which is why they wouldn't just replace the screen.

Needless to say, I'm very disappointed and rather suspicious. Does dropping iPhones normally cause internal damage, even if it seems to work fine afterwards? Is there any possibility that they could have damaged it while they were repairing it, and simply decided to charge me for that? And lastly, is there any hope in badgering Apple Support further about it, or should I just close the case and accept that the money is lost?