Tho i don't have a child with this condition, i do have Erbs palsy myself due to my being born naturally and also getting stuck. I was a 10lb 11 oz baby and was born with a broken collarbone and a dislocated shoulder as well as the nerve damage. Unfortunately for me, medical science wasn't as advanced 40 years ago as it is now, and apart from my parents taking me to a chiropractor at 6 weeks of age for several months of extensive treatment, i regained the use of my left arm to a certain extent. I have the typical limp looking arm, slightly shorter than the other, unable to raise it to the full extent,and unable to turn my wrist over. Tho through my life i have found some things difficult, such as Gymnastics, Ball games and Athletics at school, i learn't to swim and managed several other sports. Through out my life my arm has hindered my from some activities, some days even styling my hair gives me shocking cramps in it, but most things i have accomplished and it has gone unnoticed by the general public. I have never had a problem in any of my jobs. I have had to have physio every several years to loosen up knotted muscles, but am proud to say that the last x-rays on it 6 months ago showed no signs of arthritis yet.
In this day and age, with medical technology as advanced as it is, I'm sure your daughter will recover the full use of her arm without any worries.