That's a nice gloss, but she didn't "find it hard to distinguish," she made no attempt at all to distinguish.
My namesake protested, under oath, at his trial that he was completely loyal to the Queen in all matters save religion, and in particular that he respectfully disagreed with the Pope that she ought to be overthrown.
He was hung, drawn, and quartered at Tyburn.
Elizabeth became Queen in 1558. Looking at a list of Catholic martyrs, I counted 10 killed between 1558 and 1580 (I was in a hurry, so may have missed one or two...). After 1580, the number killed goes up dramatically - I’d guess dozens in some individual years alone.
http://en.wikipedia.org/wiki/List_of_Catholic_martyrs_of_the_English_Reformation
So for the first 22 years of her reign, she was, by Tudor standards, very tolerant. Compare it to Queen Mary’s executions of 300 Protestants by burning at the stake during her 5 year reign prior to Elizabeth!
There were multiple Catholic plots against Elizabeth prior to 1580. Campion died in 1581, when the persecution of Catholics started to explode. My point was NOT that Elizabeth didn’t persecute Catholics, but that she showed unusual restraint for a medieval monarch. Only after multiple plots against her did she take aggressive action.
We can look back and criticize her, but her life was in danger for years, and the Pope in 1570 encouraged her subjects to rebel against her. Mixing politics and religion can have terrible results, which is why Baptists have always been against it.