All I can say is that it is good to visit cats and should welcome it, if they dont I would be worried.
I can understand that his diabetes is a problem but he needs to eat.
The vet must justify why he needs to be kept there and not eating doesnt do it!
I had the same problem with Napoleon at two seperate very good vets and the first time they tried everything to get him to eat but he wouldnt, trashed his cage and was howling when I went through the door. He started eating at home bit only very slowly.
The second time he was very ill for a long time and had an op which he recovered from fine but he just would not eat and he came home odd days but had to keep going back cos his bladder blocked straight away again..........its a very long story so wont go there but after a month of hardly eating at vets while on a drip and off and eventually him being force fed which was awful, he just went downhill and had to have my beautiful boy PTS, he had just given up.
I elected to keep him at the vets after a very delicate op and I will never know if bringing him home may have caused him to eat again but as his bladder had been opened and stitched I thought it best for him to be under 24 hr care.
In your position I would definately bring Harry home before he gets too depressed and as said you can always take him back again if he goes downhill...............I assume your vets has 24/7 cover as she wants to keep him??
You can insist cos you know your cat best and all the vet can do is tell you the reasons why she wants him to stay but its your final decision.