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The very first Penalty Rule, 12.1 (International Hockey Federation (FIH) and adopted by USA Field Hockey) requires that the goal count despite the opponent's hand foul on the shot:
12.1 Advantage: a penalty is awarded only when a player or team has been disadvantaged by an opponent breaking the Rules.
If awarding a penalty is not an advantage to the team which did not break the Rules, play must continue.
Your daughter was absolutely correct. Awarding a penalty would not have been an advantage to Algonquin, therefore, "play must continue." Goal!
And nice pics, too!