Hi M.,
You know how kids sometimes are when they first get a pet? They reeeeeally love it, promise to take care of it every single day, walk it, love it, and bathe it. And then within a week the interest is gone?
I've found that if I'm doing something with our dogs that the kids perceive as "fun," then they want to join in too. Whenever I play with one of the dogs, go to walk them, take them to the dog park, groom the dogs etc., more often than not, they want to be involved, too.
My hubs adopted a chihuahua in March. She has growled and snapped at, and bitten everyone in the house, but more so my youngest, and now my youngest is afraid of her and can't stand her. I've noticed that when she's giving away treats to the other dogs, that the Chi will approach her tail wagging and even a little playfully. So, I encourage that, and the dog hasn't bitten or snapped at her in awhile, and lately she's been giving her treats without me having to tell her to, and will now even talk to the dog. I think they are making slow progress. I am still considering finding other arrangements for the dog, especially if we can't find a way around her behavior, but this is an aggressive dog I'm talking about who is scary and anti-social, and has behavior issues that span all her life before us. I don't know that she can ever overcome them, and that my daughter can ever be able to trust her. You say your dog is a sweetheart, and your daughter was traumatized by a dog that doesn't live with you. So, I think there's lots of hope for the two of them.
My point is, find something your daughter will perceive as fun that can be her interaction with your dog. Rather it be throwing a ball, tug o' war, giving baths and brushes, helping walk the dog on the leash, something, and encourage that interaction and bonding between them, closely monitoring them. After some time, she'll be fine with the dog.
I strongly suggest you stop telling her to yell at the dog to go away. That will only in time associate her negatively to the dog, and make him afraid of her also. You want them to both associate one another with pleasantness and fondness, even to love each other, and to do that, they need to not be afraid of each other, and they need to bond.
Best of luck to everyone. I know what it's like to have a child very afraid of a dog in the house. It's really hard and sad.
K. W