Morethan, don't worry, everyone panics from time to time :-) You'll become more confident as you see your daughter grow and you realise that what you are doing is working, even if not to someone else's timetable.
And yes, definitely, diary-writing skills lead into essay-writing - you don't write things randomly in a diary, do you? You probably want to organise your description chronologically, write about each bit, introduce new people, etc. If she's writing anything, I think that's great.
I used a book from the Writing Strands course with my ds, and really like the books - even if your daughter didn't want to work through one, it would probably give you some ideas (not National Curriculum ideas either!) on how to coax a bit more out of her.
And I don't necessarily think it's harder to catch up (with whom?) with maths. I actually tutor maths, and I have a lovely late-twenties tutee at the moment - he was in set 6 out of 7 the whole way through secondary school, and he's now redoing his maths gcse, is going to pass easily - in fact should get a B - and is really enjoying it.
It's always easiest to learn something when you're in the right time and place for it. Your daughter will find hers, honest :-)