It's so fun to see this game again after all these years!! It was one of our favorites when my siblings and I were little. I'm trying to remember how to beat Level 2... maybe by watching the path the boat takes when you're not in it, then restarting the level, getting in the boat, and following that path?
No, it's because she doesn't know the controls to play this game. At 0:30 you can see that when you press "X" it rests. Once you're in a boat, you can press "X" and let the boat flow down the river. You'll have to drop onto one of the islands in the middle and make another boat tough.