I might sound stupid but what do I say to a 3 year old

A three year old that is 4 next month. My niece told me I was dumb today because I wouldn’t let her lock herself in the dog cage with the dog.

Annnd my aunt or my mom would have ripped me up by my arm and spanked my butt for that. I absolutely will not do that, sorry I’m just not the type to hit a kid. SO, I just said that wasn’t nice and that she can’t call me dumb because I am her aunt and that is not respectful. Is this the correct way to handle it? Check me If not. She didn’t do it again but I don’t want my nieces and nephews calling me dumb everytime I am correcting something they do. I want to be stern but also not someone they dread being around.

Be easy with me. 😂 I’m a new auntie around here. And childless, I worked in daycare for years but only with infants who couldn’t talk.

I want her parents to have a good weekend without me calling them and being like “your kid called me naaaammes.” Lol