IPod Touch 5th Gen.: Repair or Replacement?

Since my iPod was unable to turn on (only a red battery icon shown), I took it to an Apple Authorized Service Provider, after few days of checking they said it had a hardware problem and I would get a replacement. The thing is I really don't want to replace my iTouch at all costs, repairing it for a minor fee would be better because I don't want to lose all of my data which (and the iPod itself) means so much to me.
I looked up on Apple's website and  from what I understood there seemed to be a repair for iPod Touch for $149 (no charge for the in-warranty), but the customer service supporter at the AASP told me replacement was the only choice. I'm unsure what to do now.
I kindly ask somebody to just, enlighten me; I really hope I do not need to replace my iPod (or if I have to, how could I get a new iPod for replacement (a refurbished one with implicit problems will take so much time to be re-replaced)? And how long would the replacement one be covered by Apple's warranty?). Thanks in advance.
iPod Touch 5th Gen., iOS 7.1, in-warranty until Jan 2015.

Apple does not fix your iPod. They exchange it for a refurbished one of same model and capacity.  That is Apple's business/repair model.
In the USA, I would make an an appointment at the Genius Bar of an Apple store. Most likely I wood walk out with the replacement iPod.
If I send it in in the USA
How long will my iPod service take?
Service arranged through Apple normally takes approximately one week. If your iPod is personalized, you can expect service to be completed within approximately ten calendar days from the time you send your iPod to Apple.

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