Jetsetlady,
The sensible thing to do, before saying 'No', is to look at the customer's profile. Has he/she flown a lot? Have they spent lots of dosh on Business/First recently? If you see a 'Yes', the start kicking in flexibility, even if it means bending the rules. Especially in today's climate, where you REALLY don't want to lose Business or First Class PAX to other airlines just because you followed the rules.
I had the situation last year where the last flight from Nice was cancelled. (and I'm on a 'No changes' 'D' class ticket). BA found me a hotel room, but on getting to the gate for the next morning's flight, my Club Europe aisle seat had turned into a Euro Traveller window seat - and there was no room in Club Europe all of a sudden. In spite of 5 years of holding a Gold Card. We did a deal where I took the next flight in Club Europe in 1D (which I was originally in) and BA paid for all the 'phone calls. And I got £50. But if I'd had an onwards flight to catch, it would have been my last flight on BA. Plus a compensation claim.
So flexibility is even more important today, As they say on American ' We know you have a choice when it comes to air travel'. P*ss off the customers and they (and the airline) will be gone tomorrow - like PanAm and Empire Airlines and BCal......(which last I don't miss at all!)