It sounds like your daughter may be experiencing night terrors:
Night terrors are common in children aged between 3 and 8 years old.
A child who experiences night terrors may scream, shout and thrash around in extreme panic, and may even jump out of bed.
Their eyes will be open, but they're not fully awake.
The best thing to do if your child is having an episode of night terrors is to stay calm and wait until they calm down.
Your description that this keeps her awake the entire night isn't a perfect fit with the textbook example of night terrors, though.
The emphasis on this doll character seems reminiscent of hypnagogic hallucinations:
Hypnagogic hallucinations can occur at the onset of sleep, either by day or at night. They are usually quite vivid and visual.
Visual hallucinations usually consist of simple forms such as coloured circles or parts of objects that may be constant or changing in size. A formed image of an animal or a person may appear and it is often in colour.
Such hallucinations, while less common than night terrors, are also linked to sleep disturbances, and young children go through frequent changes in sleep patterns and sleep need. (Since you may already be aware that it is also linked to narcolepsy: while I don't see any reason to think that's the most likely conclusion, note that we're not here to give medical advice).
There are of course also the mundane explanations. Children have ordinary nightmares, too, where a recurring character may be more common than in night terrors. They also have a vivid imagination, a still developing understanding of the world around them, and there's the basic human inclination to see human traits in non-human objects. A young child would be more prone to pareidolia than an adult, too, so it could be just shadows playing tricks. You're saying the room was light, which I take as a suggestion that this could not be the case, but I wouldn't rule it out based on that. The biggest problem with that explanation, as I see it, is the persistency and intensity of the fears, as you describe them, which would again take me back to night terrors.
All in all, it is not uncommon for young children to be scared of things at night. It is unpleasant both to witness and to experience, but not dangerous. I don't know that there are any proven remedies, although the NHS article on night terrors mentions a relaxing bedtime routine might help.
Lastly, the NHS article has a "When you should seek help" section, which I'm including in its entirety for you to assess whether to escalate to professional assistance:
Most children eventually grow out of night terrors. But talk to your GP if they're occurring several times a night or most nights.
Your GP will be able to check whether something that's easily treatable is causing the episodes.
For example, large tonsils could be causing breathing problems at night and waking your child.
In a small number of children who have frequent episodes of night terrors, referral to a specialist service may be needed.