It's seniority in rank, not seniority in age. If Ransom gained his fourth pip after Janeway did, he would be Janeway's junior.
No doubt the Starfleet rule about the ship rather than the person mattering makes things considerably clearer in combat. One doesn't need to call up Starfleet records to see which ship is the more powerful combatant...
Although regarding this, the decision to banish both Picard and
his ship (rather than, say, send Riker orders to take command of the ship and throw Locutus in the brig, eject him in a lifepod, or execute him) may have been influenced by the E-E not being considered particularly combatworthy. For a parallel in history, the King George V
class of battleships was the most powerful in the Royal Navy during the hunt for the Bismarck
, but these ships were "the most advanced in the fleet" to their own detriment: HMS Prince of Wales
did not have all the kinks worked out yet, and the factory crews still aboard failed to make her gun turrets properly combatworthy before the engagement with the German ship, to the detriment of the British.
Quite possibly, Starfleet thought it could afford to keep the still experimental and unreliable Sovereign
class in the sidelines during this Borg invasion. And sending Picard to shake the ship down was fitting punishment for the man who lost the previous Enterprise