I agree with what you said in the last part of your post. As long as she is repeating what you say, even if it is for the most part difficult to understand and she is hearing you say the word the correct way, then it will only be a matter of time before she starts pronuncing letters/words correctly.
My son calls water "money" Go figure?? He calls our cat "WaWa", the cat's name is Lucky. But I know he can pronounce the "wa" sound but does not use that sound to say the word "water".
Also when he says "thank you" he does not pronounce the the "k" at all, so it comes out sounding like "Than you" and there are lots of other words/phrases that are for the most part intelligible but it can be frustrating for him sometimes.
I was also going to mention that I have been reading to my son since he was a few weeks old and still do read to him everyday if possible, and I always try to repeat words he says his own way correctly so that he can learn the correct pronunciation.