Edie,
First off, I'll just say that your honey's narration was great, and you should be so proud! You could just continue as you're doing with the help of the tips from the Appendix titled Written Narration Skills as your guide.
Next, since you asked such good questions I'll just share a bit about CM and her progression of skills, so you (and everyone else who wonders about these same things) can see what we're looking for in a written narration. This is likely much longer than your question warrants, but since we're on the topic I'll share anyway.
Typically CM did not expect kiddos who have not had much practice orally narrating to do much in the way of written narrations, as oral narration is seen as a stepping stone to writing written narrations. This is one of the reasons why we begin written narrations very slowly and in short form in Preparing Hearts, as kiddos still need to firm up their oral narration skills first as they are transitioning into written narrations.
CM-style written narrations are not meant to be summaries of the readings, but are instead meant to borrow wording and phrasing from the author to convey what stood out to the child within the reading. We begin writing written narrations on very short portions of readings first to allow kiddos to hone this skill. So it is good to know that when you read your child's written narration, you're not looking for a summary.
CM also did not have kiddos do much in the way of written narration until they had first been exposed to years of copywork and studied dictation during which many of the skills of spelling, grammar, capitalization, punctuation, and usage were meant to have been practiced and internalized.
So, by the time kiddos were writing written narrations they were supposed to be strong oral narrators, have been doing copywork for years, been utilizing studied dictation, be used to interacting with living books and the higher-level vocabulary contained within them, and be ready to turn their oral narrations into written form.
The reason that we place a target limit of sentences on beginning written narrations is that often families who are new to HOD have not had much prior practice with the skills CM considered foundational to readiness for written narrations. So, consequently the task of written narrations may come up in our guides before a child coming from a different curriculum or approach is technically ready for that skill if they are new to a CM-style curriculum. By easing into the skill of written narration in a bit more guided form as we do in Preparing Hearts, all kiddos can be successful with written narrations.
It also makes it easier for a parent to assess a written narration and to guide a child toward growth in this area when the volume of writing produced isn't overwhelming and full of endless spelling, capitalization, grammar, usage, and punctuation mistakes. CM did not want children writing written narrations until they were firm in their copywork and studied dictation skills, making sure that they would not produce endless mistakes in their written narrations.
By limiting the child's written narration length a bit, we can be sure that the child isn't actually practicing incorrect spelling and grammar skills during written narration time and instead focus on written narration with a bit of fine-tuning at the end. However, we wouldn't want your child to rewrite her narration in "corrected" form, as this would lead her to believe that there was only one "right way" to write a written narration (which we know isn't true).
I share all of this to show you that CM had a very steady progression she expected children to go through prior to allowing them to do any writing of any length that wasn't copywork!
Since you're newer to HOD and to CM's methods, I would definitely encourage you to try to generally follow the length guidelines (or somewhere in that vicinity) within our guides. As the weeks progress, the length increases. Make sure to use the Written Narration Skills Checklist to edit the narration at the end in steps as outlined in the Appendix of the guide. This will allow your child the baby steps she needs in writing written narrations, while allowing her to practice all of the other needed CM style skills needed to produce good written narrations at the same time. I really think she did a great job with this narration, and you can praise her for her work. She appears to be a natural!
However, as you continue on with written narrations, you may find the suggested length guidelines to be your friend, as this will also moderate the writing so that your sweetie doesn't end up producing pages of writing that could stray far from following needed grammar, spelling, punctuation, capitalization, and usage rules. Yet, she will still be able to express what she took from the reading in written form.
I am not a CM purist, yet I do love so much of what she sets forth in her philosophy. For me the marriage of CM's strategies with my own 20+ years now of experience with kiddos in writing has led me to this progression in the area of written narrations and later to our stance on other forms of writing in general.
I spent 11 years in the public school classroom as a teacher during the "Writer's Workshop" era of public schooling where kiddos where encouraged to write as much as possible on whatever topic they desired with little to no editing of any kind. That type of writing produced children who wrote volumes of pages of writing that was incomprehensible and often without any use of conventional spelling or grammar! This is the opposite of what CM has in mind with her steady progression of needed skills to set a child up prior to writing written narrations. I hope this helps you see the method behind what we plan and schedule and lets you know that we will steadily guide kiddos in the skills of written narrations while making sure kiddos have the CM-type skills in place needed prior to writing volumes of sentences!
Each guide progressively builds on the skills from the guide before in small increments allowing any family to come into our guides and utilize CM-style skills in bite-sized pieces.
I typically have my own children follow the general suggestions for length and the questions within the guide to help them in their written narrations, even though we have done a CM-style education for many years. Eventually, the questions begin to fade away in the guide, and the child is left on his/her own to write a written narration. But, this extra step of guidance goes a long way in helping kiddos transition from oral to written narration, especially if they haven't had as much practice in orally narrating and previous CM skills as needed.
My first two kiddos are natural, avid writers who are able to produce volumes of writing at the drop of a hat with few to no errors. I attribute this to years of a CM education. It would appear that you are blessed with a child such as this too.
However, we still find that following the lessons in our guides helps my own kiddos to produce written narrations that are in the style that CM suggested while still giving some guidance in the process for both parent and student HOD style. We pray you will find the same to be true.
Blessings,
Carrie
So based on what you said I will try and focus on greater mastery of oral narration skills and then work into the written narration? The check list in the appendix should be a great tool for me. 
. Where is CM going with learning to write down narrations in this way? I'd love to read more about her philosophy although I find the sheer volume of material overwhelming! 
I liked reading Levison's, Andreola's, and Gardner's books first.