Hi Shanna, I took Jaida to the GP about a month or so just to make sure this is what it was and he confirmed it was Molluscum Contagiosum. It is usually contracted from another child either in a bath/pool, using their towel etc etc. Unfortunately theres nothing you can do to treat it which is disappointing as coming up to summer it looks quite bad I know. They will start to clear up them selves after around 9 months, which I have found Jaidas are starting to do ... they turn quite red before going kind of scabby, then healing. I have included a web site for you to confirm whether this is what your daughter has or not (It does have a few graphic photos on there just to warn you), but has excellent diagnosis photos (Jaidas looked very similar to the first photo)..
Let me know how u go ... and hope this helps.
Jaida (6), Ameli (2) & Lacey (2mths) - SA