We never got more than a year out of most backpacks, but we got an average of 2 years out of LL Bean. They aren't cheap though, so plan ahead in case she decides in 6 months or a year that she hates the color and just HAS to have the latest character backpack. (I'm not saying to buy it, just to prepare for the argument!)
Re the size, it helps to find out what the teacher is going to expect in terms of materials coming home. Most K (and I assume TK) kids don't have homework (thank God!) and it's not all that likely that your 5 year old will take the time to put papers, notices, permission slips and so on in a folder with pockets. Unless she has developed this habit through preschool, I think you can expect to have papers shoved in the bottom of the backpack, which you will find after they are covered in spilled juice or clean but the day after the permission slip was due!
Mostly, I think it's more important to have room for a lunch box, their little projects that they bring home, and various articles of clothing that they don't want to wear during the day or on the way home, no matter how you sent them to school. I see your address as LA so you don't have as much of the hats/gloves/mittens/scarves that we have in New England, but still... So I'd go for a big opening and not a lot of compartments, since kids just shove stuff in there willy-nilly anyway. If there's one of those side pockets (sort of a net-mesh thing) that will hold a water bottle, that's good - keeps the liquid out of the main compartment. Get a carabiner so the loop on the bottle can be anchored to the backpack. Remember that kids' backpacks don't always remain upright - they get knocked over on the bus, stepped on while kids are jostling to line up, dropped on the floor of the car, and shoved sideways into a cubby.
The only problem with LL Bean and similar bags is that they only come in a few colors, and many kids will have them. Although these bigger stores provide an option for personalization, there are often cautions (by safety experts) against putting a child's first name on a backpack, and not all kids recognize their initials. So you'll want to find a way to individualize it. There was a fad some years ago involving those stuffed animal key rings and so on, but some schools vetoed them because they got caught on things (playground equipment, more). So you need to find a way to help her identify her bag in a crowd - same problem we all have at baggage claim when all the black wheeled bags come off the airplane at the same time. It might be as simple as a bright ribbon, but keep that in mind when you are ordering a color/style that will be popular.