Thanks for all these ideas!
At present I am leaning toward building up the curbpick Nishiki mixte. I will try to find a used 3 speed hub and shifter, some upright bars, fenders and chainguard at the local coops. I will probably take a chance with the cheapest generator hub I can find, which I will try to disguise & uglify, and to protect with the linked VO antitheft skewers. Or a cheap bottle generator. Plenty of reflective tape on the fenders, cannibalize the reflective sidewall 32mm Kendas from the UO-8. The milk crate basket / pannier sounds both practical and theft-deterring. This will rescue a frame from the trash pile and should be a skirt friendly beater campus ride.
Your daughter is a lucky girl. That sounds like a perfect campus bike for a woman. It also sounds like a fun project for you!