Definitely be honest with her and allow her to ask questions. If you don't know the answer to something, be honest about that too. Sometimes, it really is true that good people do bad things. No one knows what happened that led up to the actions of these two individuals, what this woman was thinking, how she justified it, or how it all came out. What's good in this situation is that the coach confessed so hopefully that will spare the child and family in the situation the traumas of a trial. Hopefully, the confession means that she knows what she did was wrong and unacceptable and she won't ever do it again. I pray that it doesn't turn into a Mary Kay Letourneau case.
In my parents' and brothers' church, it was recently found out that the favorite priest had "inappropriate contact" with a teenager recently. He had been e-mailing with her and said some inappropriate things, possibly some pictures were requested by him that he shouldn't have requested, and no one is quite sure of the circumstances. Some details are leaking out that it may have started with this teen girl that she was shy and had extremely low self-esteem and he was trying to help her but it got out of control. Shortly after he was informed that there was an investigation, he tried to commit suicide. A week later he was arrested. It's been devastating for the church, with everyone asking the same questions your daughter will have. My own children knew him because of family events in my family even if it wasn't our church.
We still believe him to be a good man... who did a horrible, horrible thing. And it would have been just as bad had the teen been an adult woman because we're Catholic. I've had to have this conversation with my eldest daughter and my brothers (who are adults). All the good that this person did prior to this bad act aren't erased. It just make sit harder to understand and reconcile what happened.
I'm sorry that you have to deal with this. I know you'll find the right words. Just know that it's going to be an ongoing discussion.