I'd go with the 32GB. We have had a couple and we've always ended up getting additional storage. Stuff is stored both in the cloud and locally, but if you are out somewhere, she'll want a local copy so she can read (if you aren't connected to the internet).

I am looking to buy my daughter a Kindle so she can read eBooks and listen to audio ones. Do I need to get the bigger storage size, 32GB vs 8GB? I am low tech and prefer to read paper copies, so I have no idea if everything is stored in the cloud now.
Thank you!