I found this way too late as my son is almost 20 lbs at 8 months old, but had I realized it was available when he was a newborn, I would have invested in it. The back is adjustable so she can sit up a little and still be "hugged" like you are holding her.
Arm's Reach-Beautiful Dreamer Cocoon -$134.99 at babies r us
http://www.toysrus.com/product/index.jsp?productId=2958428
you can google other places to get it and see if you can find it cheaper.
I wish they made it to fit bigger/heavier kids, I would buy it in a second. My will only stay in his crib until between 1am on averag-3am if we are really lucky. And this is only the past two weeks since I bought and cut to crib size memory foam topper. Otherwise he is in our bed-which is the memory foam holding my hand for dear life.
GOOD LUCK!