If your child isn't really into picture books right now I'd just focus on what she likes. Not everyone likes fiction, some people always prefer nonfiction. If she mainly likes the nonfiction books with photos of things then I'd get a big supply of those and just aim to make reading together part of your day and try to bring in a variety of these books that she likes so it stays interesting to you both and so you have new things to talk about. I try to make the focus of reading together on learning about the world rather than learning to read.
With Starfall, it might be good to pay attention to what the games are teaching your daughter and try to point out related material in the environment at stores and at home. We've only had a Starfall reading app for about a week and maybe it differs from the computer version but for example if your child likes a song that says "double e says ee" then you could point out words in stores with double Es and sing the song to help reinforce things that Starfall is teaching.
The main thing I focus on is not letting my child be obsessed with anything at the expense of other areas of development. When you are an adult and have an all consuming interest that can be a good thing but not at age 3. My child is at the level of recognizing a lot of words and trying to sound out new words but not yet really reading and I'm not sure Starfall will help bring her to the next level but she does really enjoy it. I think my child would easily play games like Starfall all day and would learn a lot this way but that at this age it's especially important to make sure that most of the day is about developing a range of motor skills, social skills and cognitive function (especially executive function, attention, working memory) and that games like Starfall are providing limited benefits. Not that you said or implied you were letting your child play Starfall all day, this is just a big issue within our house right now with at least a few tantrums over active screen time limits pretty much every day so this is where I am on the issue right now, having given it a lot of thought lately. I second guess myself all the time and wonder what would happen if we didn't have screen time limits. I wish there was more research on this topic (negative effects of active screen time) so I wouldn't feel like I was guessing all the time.
