If a child is drinking too much milk (or any drink, for that matter) they won't have any room to eat 'real' foods, so I have heard that too much milk is bad. I don't know about the iron not being absorbed, though. I was told that the thing to avoid is having them fill up on milk or juice before they've eaten other things, so offer a variety of foods at meals before bringing out the milk/juice, and give them water between meals with whatever snacks they have.
I don't know how old your daughter is, but at 12 months, we started our children on whole milk with meals plus one sippy before bed (probably a total of about 16 ounces) Water or juice are for snacks, unless they ask for water (water is always good). We have three meals with snacks between for the kids, so they get a good variety of foods/nutrition.
If they don't want milk, it's not a problem as long as they're eating other foods with calcium, protein, etc. I have three kids and only one of them really likes milk. The other two eat other dairy products, so I think it evens out - there's no reason to force milk if it's that big of a fight. My oldest (5 years old, now) prefers water to all other drinks, actually.
Hope that helps!