surely she will still wake when co sleeping and I will still need to rock her back to sleep?
Yes
With the dummy if it constantly falls out then I will just be up replacing it anyway?
Yes
Or would it teach her and then her not need it to be placed back in a few weeks time?
No, she'll need it long term
Also if she's sucking on a dummy in her sleep is she truly 'asleep'?
The dummy is only used for going to sleep. Once asleep, the body's muscles relax. That includes the jaw muscles that baby will use to suck the dummy. So the dummy falls out. Its meant to, since it has served its purpose of getting baby to sleep. When baby wakes up, until baby can put her own dummy in, you'll need to do it for her.
So when sucking the dummy, she is not in a deep sleep. She is in the lighter 'getting to sleep' phase. Takes about 10 minutes or so to get in the deep sleep. Then baby is properly asleep.
You'll get the same light sleeping 'getting to sleep' phase regardless of method you use. Some will keep baby in light sleeping much longer. Dummy is an exceptionally effective way to move into deep sleep, that's the reason dummies are amazing things.
She is waking much less in the sling than she has in the pram
She will find comfort in her closeness to you. There is no problem in that at all as long as you have realistic expectations. Baby will be napping for several years, until around 3 years old. She may always need that closeness to you to sleep, or will find sleep difficult without it.
By her napping in the sling in the day, and getting through the sleep cycles quicker/easier, will that help her get through them at night too
The idea is that good sleep = better sleep. A baby getting plenty enough sleep over 24 hours is easier to get to sleep, will find is easier to get into a deeper sleep and so will have overall less light sleeping, therefore wake less frequently.
Overall calories over 24/48 hours (as oppose to specific hunger at specific times) also profoundly affects how deeply a baby sleeps.
So if you have a naturally deep sleeping baby, getting plenty of calories over 24h and plenty of sleep over 24h - it doesn't really matter what methods you use to get that baby to sleep. Because once asleep, baby is far more likely to stay asleep for as long as is needed. These are those babies you hear about who sleep 12h solidly from 8 weeks old. It makes no difference if these babies are rocked to sleep, use a dummy, cosleep - they stay asleep anyway, so there is never a need to put dummy in, or rock back to sleep.