Thanks for the compliments! And off to your questions:
1. DS's must be patient, creative and work hard during the recruiting process. The reality is that there are many, many (and many) quality Liberos/DSs out there and their skill sets are rather similar. Because of this, college coaches will focus on the hitters first, setters next and DSs last; they can get a quality DS very late in the recruiting process. DS is a position that I think a recruiting service, like NCSA, could be a good investment because the VolleyFamilies need to have someone in their corner, actively marketing their PSA, providing complete information and assistance, and using the technology (video, email, etc) to the fullest.
2. As for scholarship support, this depends upon many variables. DI only has 12 athletic scholarships (if fully funded), so when you see 4 DSs on the roster, you can expect that a few of them are probably walk-on players. DII allows programs to package scholarship moneys from academic, athletic, merit and need based sources, so on these DII volleyball rosters, the DSs may be receiving some degree of scholarship support (usually known as a partial scholarship). But, remember that even in DI, any volleyball player who is a walk on can still receive an academic scholarship, so it can get a bit fuzzy to say who receiving "scholarship money". But, in light of answer #1, DSs are not prime to be awarded a scholarship because college coaches are looking to secure attackers first and foremost.
3. Confidence can be a challenge because of her position; again, all the recruiting love is going to other positions so it can be a mental grind on the DS's. First of all, trust the feedback she is receiving and then, go watch a college volleyball practice or match. Beauty is in the eye of the beholder, and only by your daughter going and seeing live collegiate volleyball can she project if she has the skill sets to play (eventually) at that level. I can go watch a pro golf tournament and know that I will never play at that level, even though I play golf. But, when I went to my first live collegiate volleyball match, I knew I could excel.
4. That is a very large question - To give you the Cliff Notes answer: talent, physicality, projected growth of both, and attitude (order depends on each college coach). In the end, ability drives opportunity. If a coach believes a players is good enough to help them win, then they will recruit that player.