<p>Hey MSUDad,
If we take each of your criterion in isolation, your D's dedication and love for British Lit/Drama does not necessarily require education in England. Within the US, there are several liberal arts colleges that are excellent for teaching in such fields. Each have a strong community feel to them and give the individual creative freedom. But if she is keen on studying in England, that would be a fine decision too. I'm guessing her main reasons would be living in an environment and being part of a community that is closely linked with her major. Almost every school in the UK will be able to fulfill her in this respect, however each will have a different approach. A school like UCL will have maximum exposure to current writers, directors etc. due to its location. I more isolated campus university on the other hand may be more suited to her. Since you haven't really mentioned cost as a consideration, I wouldn't address that but London is one of the worlds most expensive cities.
UK universities may be perfect for your daughter and your preferences since the overall university has a large student body with small classes in each department. This is due to the application process, where each course has limited seats available. Warwick for example has a decent number of students in total, but some classes can have between 8-12 students. I agree with your view on state schools.
It is important to have cross-cultural experiences for an integrated global economy. However, the education that she may recieve in the United States will have a global perspective as well and she will meet foreign students. The UK, on the other hand, would have one clear benefit that she herself is an international and that changes the entire equation. Apart from that, both equip you for a global economy.
The UK does treat you like scholars in your field and gives you academic freedom to research and study your field. The expectation of undergraduates for certain courses is extremely high and the student-prof interaction is great. One is greatly encouraged to do extra reading outside class and bring new perspectives to the table. In that respect, the UK helps students to mature in their work ethics and writing style. The main difference, in my perspective is that colleges in the US require a lot more written work to be submitted, whereas the UK colleges assess you on several intangible criteria. I maybe wrong but thats my sense.</p>