We just got DD's passport. She had to take passport pictures and then we went to our local post office to process the paperwork. We got it in about 3 weeks.
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Yes she does. You and your DH will have to go in person to apply for it. If only one of you can go there is a waiver that the other parent has to have notorized in order to get the passport. You can fill out the form online and print it out.
Re: Question about passport for DD
you can check out this website for details
https://travel.state.gov/passport/get/minors/minors_834.html