collections
I am a calibre novice, but I have some info that might be useful. More experienced members will, I am sure, correct my errors.
My understanding is that it is not possible to use calibre for Kindle PW2 collections (I assume that's what you gave her?). In fact, you can't even share the PW2 collections with a Kindle 4 PC.
In order to organize collections on the Kindle PW2, this is what you need to do:
Kindle PW2 collections instructions
As you can see, the collections on your PW2 will be shared (through the cloud) with Kindle Paperwhite, Kindle Fire HD (2nd Generation), Kindle Fire HDX, Kindle for iPad, iPhone, and iPod touch, and Kindle for Android.
I recently tried to reorganize about 1,000 books on a PW2. I created all the collections I needed, then populated all the books into the collections. It took me about 3 hours altogether. The PW2 interface for collections sorting is actually quite decent compared to the Kindle for Android (as a comparison only of course - on its own I feel it's awful). Of course, it would be much better if we could use calibre for that.
You can have a quick look at
this thread on mobileread, which, I think, confirms what I am writing about calibre and Kindle collections.
mobi vs azw3
My understanding is that mobi won't work on the PWs, you need AZW3.
covers
I can't help there...