I've used one of those Trail-Gators (in fact it's still in the garage somewhere). My son (now 13) really enjoyed being tagged along. I think I first starting using it when he was 5 or so until 7 or 8.
You're right that you've got to make sure your daughter doesn't lean over too much as that really unbalances the system.
Also, you've got to carefully plan sharp turns again linked in with the passenger leaning, so the trick is to get them to be looking ahead and trying (hopefully) to anticipate what's coming up.
You can tell when they're not pedalling, but even so it didn't seem too much of an extra effort otherwise, although I never did any really big hills. The big advantage of the Trail Gator over a tag along is that when you get to your destination, you can fold away the bar onto your bike, and half pint can then pedal around on their own.