LT, it sounds like you're quite anxious about this situation and from your H's behaviour he seems very anxious as well (he also seems clueless about how to manage an anxious animal I'm sorry to say).
Anxiety feeds on anxiety so the more you and H (whose anxiety seems to be coming out as frustration towards you and the dog) display anxious behaviour, the more anxious D and pup will become.
I don't think you do need to shut your daughter away from the dog do you? If you are modelling that you will be away from the dog and with her all the time, you're not showing her that it is safe to interact with the dog.
I do hope you find a happy way to resolve this, in the best interests of pup. A good place to start is to try and relax and be 'okay' with whatever the outcome may be. Whether this resolves itself organically as you all begin to get used to each other, or whether pup needs to find a home more suited to her needs, either way you haven't failed. So long as you treat her well and make decisions in her interests you are doing just fine.