My advisor rejects my idea, but claims that the modified version is hers. What should I do?
I suspect the advisor is relative young and probably not fully even aware of the problem. Her perception of events may be completely different. She may feel that she contributed the essential part of the idea to make it valuable. She may not even remember that the idea came from you originally. But that does not mean that she shouldn't be corrected and give credit to you.

This can probably be solved by communicating with her, or by communicating with someone more senior, who could have a talk with her. Are there any annual progress meetings where this could be done? 

Not dealing with the problem will only exacerbate it.