I can't really imagine being in your shoes. I agree that she's too young to really understand. Perhaps you can find a way to just be involved in her life and eventually when she's old enough to understand explain what happened.
I never met my father or brother or sister. I know they exist but I know I'd be pretty pissed if they showed up now 33 years later.
Good luck in what you decide.
Perhaps you should just go ahead and write the letter. Then you'd have your feelings out on paper and you can give it to her when you are both ready.