It's great news your DD is happy in the current school!
As for the music thing... There are others on this board that probably have better advice, but I'll tell you what we did. Our DS hated taking piano, from the beginning. We continued to make him go until he hit a moment where he could really notice that practicing made his piano playing better. (He ended up taking piano for about 4 years.) Then, when piano became more of a chore for me (getting him to practice, etc.), we let him choose between his sport and piano, both of which you need to practice to get better at. He chose his sport.
You may have a different perspective, being a musician yourself. Not sure if that helps or not in this situation! I guess my suggestion would be to not let her give up after a year of any one instrument or activity, and especially don't let her give up just when it's getting difficult. It seems that music learning comes in chunks, where you get over some level and then reach a new plateau, and it may take awhile again to get to the next level. If it were me, I'd say give guitar one more year at least. Hopefully others here will chime in with music advice.
