I hold my son in time out. We just make it short - 30 seconds to 1 min - because we only just introduced it and he doesn't yet fully grasp the concept. Maybe you could try putting her in a boring (but safe) room if she wont stay in time out?

We use other consequences, 'if you hit the baby with that toy I'm going to take it off you and put it away' or 'you can play outside AFTER you put your pants on and brush you teeth'.

My toddler, similar age, does this sort of defiance thing too. It's usually coz he's tired, hungry, or needing attention. Usually a good dose of attention & a quiet day at home fixes him up. Hard sometimes when you've also got a baby to tend to, though. I've found devoting as much of the day as possible to doing activities together while taking breaks to tend to bubs works well.