OP there's a lot to say about this situation. From the POV of a university lecturer, your DD does not sound ready for university. She doesn't sound healthy enough - we have a policy at my place that students are 'fit to sit' - and this can mean mentally fit as well as physically fit. If she broke her leg, neither she nor her coaches would expect her to participate in her cross-country running, would they?
Ditto for the trauma she is clearly still processing with added PTSD, poor lamb.
I'm at a top10 university, and our students need to be pretty fit, in mind & body, to thrive. They can survive, but thriving is what we - and they - want.
So, if you can try to have her do a gap year. Maybe at home, working a simple, no demands job, where she'll meet lots of different people, and realise that there are ups & downs in everyone's lives, and resilience is when we ride them out without too much harm to ourselves or others.
She sounds as though she's coping but only just. I've taught young women like her. THere's a long essay to write about the particular pressures on high-achieving, lovely, attractive, nice girls like her. I won't write it here, but I will say that I think what I see in this current generation of high-achieving, lovely, attractive, nice girls is that they are getting the worst of both worlds at the moment.
We live in a patriarchy - a society that values men & "masculine values" much higher than women & "feminine values." Most young men don't feel that they have to deserve their very existence by proving how successful & excellent they are at everything. Whereas, young women like your daughter seem to feel that the only reason they deserve to exist is if they are good - good people (ie not mentally unhealthy) slim, attractive, clever, successful at school.
It's people-pleasing & high-achieving, mixed in with the faux-feminist rhetoric that you can 'have it all.'
I know that from my own experience, but I was given the analytical tools of feminism to help me see that it wasn't about me as an individual, but about a social system which positioned me in a way that made some things far far more difficult to achieve than the equivalent young man.
That's the theory, anyway. But it has individual impacts, and it sounds as though your daughter has experienced those, plus severe personal trauma - a perfect storm.
She needs to step off the treadmill. Then she might see what she really needs and values to nurture herself as an entire human being.
As an English Lit. person myself, I understand your dismay at her thinking about aiming low. Her results so far suggest she would absolutely fly at a tough university in the company of other bright, interested, committed students. And staff. I know it's unpopular to say this, but she just won't get that to the same degree or level at a non-research intensive university.
It may be that Cambridge is not right for her, but there are other universities with excellent English departments & excellent reputations. Other posters have mentioned most of them here - I'd add Edinburgh & Glasgow, as the Scottish system allows for a broad first & second year, and then a focussed third & fourth year - so there's time for her to stretch out a bit. It's pity she didn't like Lancaster or York - has she actually been to either town? They are delightful places to live, and both have excellent English Departments. Royal Holloway is similarly a smallish place, with a sense of community, as is Exeter - and the countryside there is very beautiful.
Leeds is top notch - a leading School of English. So is Nottingham. Birmingham has had some ups & downs, but has good people there.
But my main point is that if I were teaching her, I can see trouble in that background. I'd be counselling her to take time out, if she came to me in the state she sounds as if she's in at the moment. Weekly panic attacks are not a good sign. She may survive, but I doubt at the moment she is in a position to thrive - through no fault of her own. A year out, to decompress, would pay her huge dividends in the future.