Yes, I agree it's better to discuss those 'difficult' aspects of life like death with our kids, so they don't hear them from the wrong people and therefore form crooked perspectives about life. You are doing a good job raising your daughter and her mental and intellectual growth is commendable. About her joke, the 'baaaaahhd' aspect was what cracked me up. You will surely be proud of her when she becomes an adult.
She makes me laugh in some way daily, just by the way she navigates her world.
Some have some very strange views indeed!