Would it help your DD's fear of heights to have handles on both sides of the seat to give her something to hold onto? We have a soft removeable seat with handles for my 3-year-old GD. She prefers the soft seat to the Bjorn--partly because it's soft, and partly because the handles give her a sense of security. We also have a Bjorn step stool and a Bjorn pottychair right there, so she has a choice of equipment--and she always opts for the soft one on top of the toilet, using the step stool to help her up.
But having an especially tall toilet like yours would be an issue, I imagine.... Maybe your husband wouldn't mind trading it in for a regular seat for a while, until she is trained? Might be the easiest thing to do, in the long run!