У пожилой женщины седые волосы = There is gray hair at old woman.
There is hidden verb "есть".

So acting object is волосы, they "exist" <- action.
And specification of action with place: where? whom at? do they exist. At woman -> У женщины.

Than we specify each noun with an adjective -> the same case.
У женщины (genitive) -> пожилой (genitive).
Волосы (nominative) -> седые (nominative).

That is how it works. On my not professional opinion and debris of school knowledge. Enjoy!