I feel bad but idk what else I could have done

We have an almost 3 year old and a 4 month old. Both sleep in our room. Our 4 month old is a great sleeper but our 3 year old is not. She doesn't nap and never wants to go to sleep at night. She also wakes up in the night crying several times a week and wakes up our other baby.

Last night she woke up at 1 crying. I did the usual and held her and comforted her. She stopped crying but wouldn't go back to sleep. She was talking and kicking and rolling around playing on the bed. This went on until 5 in the morning! And my husband had to get up at 6 for work. She woke up at 7 after all that.

During this time we told her if she didn't go to sleep she was going to her room. She kept messing around so I took her to her room. But then I felt bad because she was crying so I brought her back to our bed. But then the same thing happened. So I took her to her room and brought her back to ours 2 more times before finally giving up and just waiting until she stopped messing around and fell asleep in our room.

I was so frustrated and mad. I need some sleep. I don't know what to do when she does this. Part of me thinks there has to be a boundary and I need to put her in her room when she does this and just leave her there even if she's crying. But the other part of me feels bad and feels like I need to suck it up and let her stay in our room even when she is refusing to go back to sleep.

Getting her to sleep in the first place is a huge pain in the butt. It takes an hour of me sitting with her before she falls asleep. What do I do? I believe letting a baby cry it out is wrong and raises their cortisol levels and breaks the trust between baby and parent but does that apply to a 3 year old too?