I've taught lots of people to ride, from age 5 through 40-something. (Age 14 is the hardest.)
Running alongside is futile and worse. You can't keep up if she's going fast enough to balance. Tell her to go, and watch. Don't let her think you can save her if she falls.
Sometimes I teach "practice falling" on the grass. Stand up without a bike, and fall down deliberately. This can help to shake the fear of falling.
Raising the training wheels doesn't help at all. Steering and balancing and leaning go together, and training wheels prevent leaning.
Elbow and knee pads are there more to make her feel safe than to prevent injuries, though they don't hurt, unless they impede motion. If she's scared, you could give her pads. If she's gung ho, encourage her to charge forth first and worry about injuries later.
Start with a slight slope to help her get some speed. Maybe there's a street or parking lot or grassy area with a slope. Go downhill.
The basic technique: Lower the saddle so she can put two feet on the ground flat. Remove the pedals. Hobby-horse along, pushing forward with feet on the ground. Pedaling comes later, after the balancing and turning is good. Demonstrate this for her, riding her bike or yours. Yes, her bike is tiny, but I can do it. Maybe you can, too. Ride in a zigzag pattern to show her the turning and leaning thing. Scream with glee to show her the attitude.
