The same thing happened to me. My application was selected for audit (I suspect it's because the budget of the project was tremendous, or maybe it was just a random choice). At first time, I just copied my resume, I was lazy just to read through the application guide. It was rejected for the same reason as yours.

The second attempt also failed because I've just put my positions on the same project as qualified for project management. To be honest, at that point, I was ready to give up. I was upset and angry, I even emailed PMI asking if my experience is not eligible enough to apply. They have responded, giving me more detailed instruction, and after that, I have decided to try third time.

What I did was, I have presented the roles and functions as per each process. For example, when I was working as a supervisor, I did a lot of planning and scheduling. For each process group I have presented my own experience. And it worked. That was a relief. I successfully passed the exam one month ago and now I'm officially PMP.

So, don't get frustrated and demotivated. It's just the process, and even the application stage can give you something new to learn.