B5 was an ambassadorial outpost even before the war, and that function became even more important after it gained independence and became the head of the interstellar alliance. Lochley was more than just the commander of the station, she was an ambassador from the losing side of the war and the gesture showed that Sheridan wanted to put the conflict in the past and unite everyone.
I'm going to question about where you think that the power sits.
Babylon 5 is an independent state that is a member of the ISA.
Sheridan described himself a "Military Governor" and Sinclair would vote for Earth on council meetings, following his conscience, unless word from back home decreed otherwise.
I doubt that Lochley got Earth's vote in the ISA, since she was basically on Holiday from her Earth Force duties to manage a foreign nation, so she was compromised.
I doubt that Lochley got B5's vote in the ISA, since she didn't have citizenship there, and if she had had B5 citizenship, I doubt she would be allowed to keep her Earth Force commission. She's a mercenary birthed on Babylon 5 to keep the trains running on time.
The President of the ISA doesn't get a vote because he doesn't represent a world, but from an admin point, he probably controls what legislation gets voted on and what gets misplaced forever, so he has a lot of power without actually having a vote.
So there's two people we never saw.
The ISA representative for B5, and the ISA representative for Earth.
True, Lochley could maybe have been one of those people, but not both.