The basic iPad doesn't really have any apps (programs) for writing reports. There's a very basic Notes app that you can enter text but that's about all.
For something for writing reports, you really need an 'Office-type' app, such as Apple's Pages.
One of our members carried out a survey of Office apps for his company; you can see his conclusions in this thread...
http://www.ipadforums.net/new-member-introductions-site-assistance/22431-hi-all.html
The Apple iWorks Office suite for the iPad has a set of useful Help pages that show their capabilities here...
Pages is Word compatible and can read .doc and .docx files and save in .doc and .pdf
Keynote is PowerPoint compatible and can read .ppt and .pptx files and save in .ppt and .pdf
Numbers is Excel compatible and can read .xls and .xlsx files and save in .xls and .pdf
http://help.apple.com/iwork/1.3/mobile/interface/index.html#tan724868a9
However, as far as I'm aware none of these apps have the ability to highlight words and then look up their meaning. But there is an excellent free app - the Merriam Webster dictionary app - that you could use. Any word you wanted to know the meaning of in a report you could, say, copy from the Office app - perhaps 'Pages' - and paste it into the dictionary app - and you'd then see the meaning of the word in question.
Don't forget to download the iPad User Guide (it's preloaded into the Safari web browser favourites bar). Welcome to iPad Forum too!!! Don't hesitate to come back with any further questions or follow-up queries - that's what we're here for.
Have fun and I hope your daughter has a great experience with her iPad.
Tim