There is a lot of individual variation when it comes to hair growth. It is possible, even likely, that your daughter's hair is within the range of normal. (Her hair at birth has nothing to do with this.) Still, you need to check with your pediatrician about whether there is any hormonal imbalance to explain the hair. Assuming you find that there's nothing wrong, you may want to consider laser hair removal. This is quite a safe procedure, even for a child. It would very likly help thin the hair and make your daughter more comfortable. The hair loss might not be permanent, but if it gives her a few years' respite, that's OK too. Laser hair removal is not covered by health insurance, however.