I also got an interview with Princeton so I guess they didn't see the withdraws/C+ as disqualifiers on their own, but look at our entire profile. I do have a handful of As on higher level maths courses and 170Q in GRE.
However I'm rather certain that the C+ (in ODE, an important prerequisite for MFE no less) did raise a flag when they reviewed my profile. For OP I'd say if they can comfortably retake the course without messing up the upcoming semesters' course plans, go for it. A withdraw and an A afterward would look better than say a B- or C+. Otherwise they can probably "make up" for it by having good grades elsewhere and good GRE.