I have no issues with storage on my 32Gb Nexus 7, as you say there are many options available to you including an SD Card reader and an OTG cable but trust me thumb drives are far cheaper.
As for music I'm an advocate of Google Play Music which is a cloud music player, you upload your music to Google's servers and away you go. If your worried about not having internet at times, worry not as Music can be cached to your Nexus 7 for offline listening.
As for now many, that really depends on the quality of the copy. 1080p? 720p? In other words how big the movie file is.
720p movies tend to be around a 1Gb, maybe a little more or a little less... But as a Nexus 7's internal storage is shared it's going to depends what else you gave on the device. A 32Gb Nexus 7 has about 26.76Gb of storage available, you'll have to account for installed applications and the your music so if you have around 1Gb of apps and 2Gb of music, you should get about 23 movies on the Nexus 7. As I said, it highly depends on what else is stored in the Nexus 7, games, other media et cetera and the fine size if those movies.
Personally, I add movies via a thumb drive, watch them and delete them anyway so as to make room for the next lot of media I want to put on my N7.
I see no issue with the lack of expandable storage on the Nexus 7 and it's a great device but the choice is yours.
Just out of curiosity, what Memo Pad did you buy your daughter?
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