Question: Will it hurt my 14U daughter to play for an 18U team?
Answer: There's not really a right or wrong (yes or no) answer to this question because a lot depends on the individual player's situation. In general, it shouldn't hurt her to play up if she is a) going to get playing time as opposed to sitting the bench, and b) she's socially mature enough to be comfortable with the older girls. It's also important that you feel she'd be getting good coaching and good competition---something she should get wherever she plays.
Obviously, she's young, and she's still got a lot to learn where softball is concerned. But if the 18/U team is a good one, the coaching staff is responsible and honest, and if you and she feel that she'll get enough playing time to make this worthwhile, then there's probably no reason she shouldn't do this. However, if you feel she's not mature enough or that the level of competition would be too much of a challenge, it is fine if she elects to play on a good 16/U team instead.
Keep in mind that she can always drop back down to a younger team if this doesn't work out. But overall, it should be okay. Just be a smart parent and do periodic road checks with her to make sure she's happy and having fun!!!!