That is so sweet that she wants to be a part of the birth. Is she a mature 16? If she is then she will most likely handle it fine.
Maybe too suggest to her that if she's not coping with watching you give birth that she can wait outside if she wants to, no harm done. I said this to my SIL who at 24 was quite a bit older but still was worried about being squeamish, but ended up staying and was a teriffic water girl.