Hi,
I took my eldest to his G grandma's funeral when he was 18 months old and if anything it lightened the day. As your daughter was so close I think it would do her good to say goodbye and I'm sure your family will support you in your decision. It will probably help to talk to your daughter about saying goodbye and maybe encourage her to draw a picture or make something that she can 'give' to her G Grandma on the day. My little one had done some handprints on card so we put one on the coffin for Nana. I think you are doing the right thing by letting your daughter attend the funeral service. Good luck