First off, I think you can address your questions from a religious stance.
Islam is quite clear on what you are discussing. It is unlawful, according to the Quran:
"Prohibited to you (for marriage) are your mothers, daughters, sisters, fathers sisters, mothers sisters, brothers daughters, sisters daughters, foster mothers (who gave you suck), foster sisters, your wives mothers, your step daughters under your guardinaship, born of your wives..." (4:23)
In Islam you are only permitted to have sexual relations after marriage. Obviously if you cannot marry your daughter, you are not permitted to take her as a sexual partner.
"When news is brought to one of them of the birh of a female child his face darkens and he is filled with inward grief...shall he retain it on sufferance and contempt or bury it in the dust. Ah what an evil choice they decide on?" (16:58-59)
Islam stopped many injustices against female children, one was the prohibition on female infanticide. Any abuse of children, who are a symbol of purity and everything innocent, is an abuse of Islam. A child is a gift from Allah, parents shouldn't forget about how precious that gift is - its a miracle of creation. It should incite them to do good, to be better people, to look towards higher things.
"And know ye that your possessions and your progeny are but a trial." (8:28)
Those who abuse a child, abuse their progeny fail this trial miserably.
The only question that remains is the penalty in this life for abusing the sacred trust between a child and its parent. That I am unclear about. But when I get time, I'll try to see if I can find anything for you.
As far as the second part of your question is concerned - I'd like to reply in some detail, so I'll leave that for later.
Hope I've been of some help.
Achtung ;)