Yes, she is. The daughter is a girl and a person. So we say ‘she’. Same for wife, girlfriend, sister, female friend and grandmother. Son, husband, boyfriend, male friend and grandfather would be ‘he’. Saying ‘it’ can be seen as rude because it is a person. Some people even find it rude if you call a dog or a cat ‘it’ instead of ‘he’ or ‘she’. ‘It’ is for objects and animals mostly.