I say keep wrapping.
My little one isn't keen, but like yours, her hands and arms flap around all over the shop and she just can't settle to sleep when she's not wrapped. I try sometimes to give her the benefit of the doubt but we always end up wrapped! She sleeps so much better.
My friend is still wrapping her 19 month old little man - with a cot sheet. He sleeps really well.

I say keep at it, she's obviously not really ready yet to have her arms free.
Sue x