Q: iPhone 5 - Battery swell pushing display out

Hi there Apple-Heads,

I've got an iPhone 5 of which has recently turned 3 years old. Before it had its birthday, I had noticed that the display was being pushed out and there was a minor pricking/shocking sensation on the ear during phone calls, but it took me some time to go and have it checked out by local Apple techs. When I finally did, they confirmed battery swelling and quoted $120 to replace battery and re-seat the display, and that was only because I'd apparently missed out on the 3 year window for a warranty claim on the battery.
Keen to investigate further, I've gone through heaps of discussions to find mixed responses on how the issue was dealt with by the manufacturer. Some folk have had their phone replaced completely for free, some units replaced for the price of a battery, some not at all...
I had my issue escalated with Apple and got onto an advisor (a hands-free call for safety sake) and asked what would and/or could be done about it. The only real option that was provided was to have the phone replaced with a refurbished iPhone 5 for $400+, or to head back to the local Apple techs and just have the battery replaced. Although there was concern regarding physical safety if I were to make a phone call, it was recommended to simply just not use the device.
I completely understand that there are certain time frames in regards to warranties and such, but is this not at all considered a faulty or malfunctioning product when there's been no incident at all that would cause this? It's only ever suffered falls as far as the couch to the carpet and lives in a case always.

I appreciate any assistance provided immensely!

Stay happy.

Ryan.