Just to the chorus of people saying that you/ your daughter have misconceptions about Cambridge. I self catered loads. I don't think I was paying twice. I definitely hardly ever ate lunch in the college hall. On one memorable occasion, I had ten people in my bedroom eating an entire roast Sunday lunch which I had cooked in halls!
The size of college is pretty irrelevant. You can spend as much or as little time in college. If you are big into a sport (for eg), you'll be socialising with those people. You may well spend more time with the (hundreds) of people on your course than just the ones in your college. And there are only so many friends you can make! The university itself is full of thousands of people - that's your pool of potential friends, not just your college.
The more modern colleges are often much less stuffy when it comes to gowns, Latin etc etc. Mine had no gowns, no Latin, high proportion of state school entrants. In fact, my SIL, who went to Bristol (graduated a couple of years ago), met way more old Etonians there than I did at Cambridge! (I met none all the time I was at Cambridge).
The advantages of having gone to Camb IME:
Being surrounded by a bunch of really intelligent, mostly keen and hard working peers. This was really great - to feel that people were your intellectual equal (or superior to you!).
Being taught by world leaders in my subject.
Doing literally double the work as my DH did at another top, but not Oxbridge university - they really do expect you to work hard during the short terms. Great grounding in processing large amounts of information and arguing and analysing it, as well as forcing you to be very organised and focussed if you stood any chance of a 2.1, let alone a 1st.
Fantastic range of extra curricular things going on, in every conceivable interest area. Although I appreciate other universities may have this...!
Why reject the obvious advantages out of hand (not even applying - she might not get offered a place even if she did apply!) when her reasons for not applying are not very convincing? It sounds like she may be worried about possible rejection and therefore better not to apply in the first place...