cbcb, LBM will vary from individual to individual, just as the right weight for each person of the same height will. A general rule of thumb that is used is 100 lbs of weight for 5 feet, and 5 lbs for every inch added to that. This is body weight, not lean mass, however.

If you assume a standard BF% of 25 (which is considered average) then the LBM of a 5'4" woman, using the guideline above (body weight of 120 lbs) would be roughly 90 lbs. with 30 lbs of fat.

Increasing LBM and consequently decreasing BF would mean you could weigh more and occupy less space (i.e. wear a smaller size) as muscle has roughly 1/3 less the volume of fat per pound.

To give you an example - when I weigh 155 lbs I can wear a size 6, all thanks to 138 lbs of LBM.

HTH
Nat