This, to me, is a great answer. The only other thing I would add is it depends on what you're daughter's needs are.
Let's say she's a developing pitcher. Then she needs a lot of innings in the circle to gain game experience. In my opinion she's best off on a lesser team where she will get the opportunity to learn and grow, even if they don't win a lot of games.
If she's more experienced, and has been the big fish in the little pond, then she probably needs a better team where she has to compete more to get innings. And where she will face better competition in terms of hitters. Not being the top dog should challenge her to hone her skills more. The only caveat is there must be a path to become #1, or at least get her fair share of innings. If all the spots are locked up permanently she's likely to get discouraged as no amount of work or effort will change her situation and she'll be left to sit and watch when she could/should be playing.
Most of the players I've talked to, when faced with this choice, say they would rather play on a lesser team than sit on a better one. So the player's goals play into it too. Not everyone wants to pitch for FSU. Some girls just want to play ball, so they should go where they can play rather than being worried whether they'll be challenged enough.
You took the words right out of my mouth although you said them more eloquently than I probably would have.