Without the answers to these questions, friendships can be broken, work relationships may suffer, and family relationships may become strained. Honest communication is the key to creating a healthy boundary. If Dan doesn't communicate with her openly about his discomfort from the outset, the situation will likely get significantly worse. She will unknowingly move in, his discomfort will turn into resentment and their relationship will either become antagonistic or icily distant. What should have been a simple healthy boundary became a barrier instead.
Boundaries become barriers when communication closes down.
The longer she stays, the more impossible it will seem to be for Dan to broach the topic and the angrier he will get inside. If you're still not comfortable with the idea of openly stating your boundaries, in some instances compromise may soften the blow. It doesn't get much better than that. Dan still loves and supports her and wants to help her find a solution to her immediate housing problem. If she puts herself in Dan's shoes, she realizes that Dan is not only being reasonable, but also honest and is showing her a great deal of respect in being so.