How many rows are at the bottom of the sleeve(underarm)? Is it possible that it's a cap sleeve and doesn't connect all the way around?
One solution would be to undo the shoulder seam and take up, easing out to the shoulder from the neck, making the sleeve opening a bit smaller.
I wouldn't try making the sleeve fit, it will draw on the cap and separate the sts too much. Don't you hate it when this kind of thing happens? It's a super pretty sweater and you've done a very nice job on it!