OK, I'll jump in here. I am by no means an expert, and the closest thing to formal training I've had is four years of drama class in high school and one playwriting class at university, but I have worked in amateur theatre in the past and have played leads in shows and have directed and assistant directed amateur productions (and most of them have been with teenagers, as most of these contestants are), as well as participating in casting them. It's all been at a very small amateur level, but I was able to work with some really wonderful mentors over the years (my high school drama teacher and my amateur theatre director) who did have the formal training and were very good at their jobs. I will try to speak from what I've learned from this experience.
From my perspective, when casting a musical, singing, dancing and acting are all important, but acting is the most important. I would never want to cast a bad singer in a musical, and ideally you want a great singer and actor, but when given the choice, I would always prefer a decent singer who can act the most out of the role rather than a fabulous singer who can't really act it. Acting is very evident in how songs are performed. It helps to carry off the meaning of a song, and if a song is acted badly it doesn't matter how great the person's voice is. A show with great singers who can't act can be terribly boring as well, as you have to sit through the dialogue between the songs.
Also, some of the greatest musical theatre performers in history (Angela Lansbury, Gwen Verdon, Robert Preston, etc.) have been excellent performers who didn't necessarily have fabulous singing voices. What they did have, though, were decent voices and loads of acting talent and character. I'll take performers like this over someone who just has a fabulous voice and nothing else any day of the week.
Also, as to judging how good these girls are at acting, remember that they are all very young. What you look for in performers this age is not the finished product but the potential and natural ability. Of all the girls on this show, Danielle strikes me as the one with the most potential and natural talent as an actress. She and all of them will only get better with more training and experience, but Danielle is already well on her way. She acts all of her songs, and everything she does communicates that she is thinking about the words she is singing, but not too obviously like Lauren does sometimes.
Also, Danielle approaches everything from an actor's standpoint, and none of the other girls seem to be doing this (Lauren is close, though). I was speaking about this show to a friend of mine who is a trained singer and actress, and told her about the dance task where Danielle was the only one who took on a character and acted the task. My friend said that that's what you're supposed to do, and that the other girls are "stupid" (her word, not mine) if they don't do that too. I wouldn't call the others stupid, but that task certainly was, to me, a sign that Danielle has a real actor's sense about things.
I wouldn't rule her out in singing and dancing, either. She has proven herself to be one of the best dancers, as well, and her singing voice is also very good and will only get better with more training and experience. I remember when watching the mission with Charlotte, hearing that tiny little snippet of "Enough Is Enough" that Danielle sang, think that if she is ever allowed to sing a song that where she can show off that voice, it would really help her in the show.
So, I am not forming my opinions of Danielle (or any of the others) as an actress based on what Sheila says. I happen to agree with Sheila, but it's because of what I personally have seen, with other actors in the past and on this show.