I was told by a native speaker on another thread that when the statement is negative with नहीं, the aux verb is not neccesary BUT most everyone still includes it in speech
"रहती" surely translates better as "stay" as opposed to "live". Granted, it can be informally used in that way too, but it's ambiguous out of any context.
I guess "ठहरती" would be a better words for "stay" however, "रहती" will do too.
When honaa is elided from a negative answer, the participle should have nasalized mark on the ii, right?