That is YOUR opinion and I respect it. I don't agree with it but I respect it. I chose to do what I did for a VERY good reason that you don't know anything about. Im glad it worked out for your neighbor, but as you well know when it comes to parenting that every situation is different and what works for one parent may not work for another.Most of us here are parents, and I think are pretty well in agreement that you are doing your child a grave disservice (and have done from the start) by allowing her to believe he is her father. The wow should be directed at yourself, to be honest.
Sadly, you have set her up for this emotional trauma by not being honest with her from the get-go. It did not have to be this way, had you been honest from the start. My neighbors have three children, of which the youngest two are adopted. The middle one at ~a year, the younger at 9mos. They are now 3 and 4, and the oldest is 5 1/2 (S/N). All three know the truth of their parentage - and have from the beginning. But none of them feel "less than". There is no shame in them for how they became a family.
At this point, you really need to give serious thought to finding professional help for your child. She needs to know the truth, and you are not equipped to help her at this point. But, a professional can get you both there. Please - for her sake - seek that help. The rest of your issues? Are frankly minor to this one.
This situation is exactly what I tried to avoid. I even discussed it with my husband before getting involved with him and he assured me he understood my position with my daughter. I did not know he had a hidden agenda. She is getting counseling and my children are never a minor issue to me. It disturbs me how everyone is quick to let him off but jump on me. I may have been wrong for letting this guy into my life but that happened based on deceit and everything there after was a result from his behavior that no one in this forum seems to want to address but again thanks for your response.