The Spirit versus the Letter?

[grizzlierbear]

Differing rules exist in micro and mini soccer i.e. No cards, indirect free kicks only, no offside etc… but when there is an 11 aside game at the u-10 level, u-11, u-12, u-13 and so on till adult? Can we as referees alter the rules to fit our interpretation of the spirit of the game? Considering the difference of house league, select, tournament play, high school, adults, girls or boys, men or women. In the following situation, how would you proceed if indeed you would do anything differently.
As a referee you are officiating between two (11-aside teams) who are closely matched. Both teams have traveled a few hours to get to the pitch and there will be a second game for each team later in the day. During play, the attacker catches out the keeper and the ball is kicked towards goal. It seems a sure goal when the last defender reaches up and grabs the ball with both hands, clearly preventing a goal from occurring. The penalty by the book would call for a red card and a dismissal involving a mandatory sit out of next game as well. Therefore, my question is, "When is the law the law?" Moreover, do you believe age, sex, or type of game should have any bearing on your decision? What actions would you take? Could or should you alter them? If so when and why?