OP no offence but it isn't really about you. "He is of the mindset that you have to push them to achieve their best. I felt he was judging our parenting a bit if I'm honest. Maybe we are just quitters. That's the the impression I got from him." So what is he looks down his nose at you! You are paying him so of course he is going to get the thumb screws out if his income is diminished!
"I just want to snuggle up with a good book with her and not suck all the joy out of her education." A very good choice.
"It's the worry that we are failing her somehow though that won't leave me." As I say, it's not about you, but her. Do you feel that this level of stress and homework is good for her right now? If not, what are your options? Could you and your dh and dd take a step back, think about options for her study and do some of the stuff she will enjoy, some good stuff and work towards your goals in a measured way.
My dd is dyslexic and we had horrendous trouble with homework. She stopped all homework for about 2 years. She was fine. School is a massive struggle for her, homework or not, but home was becoming part of he school problem.
If the grammar school is the best option you can still go for it but just find a gentle route that will keep everyone's mental health in check.
You are a good mum, you do have your dd's best interests at heart (I imagine), just find a more gentle route if you can.