I feel like that with that line of reasoning you could also say that a 34-year-old isn't smarter than a 4-year-old. The 34-year-old just has a bigger dataset.
Her brain processing is changing on the most fundamental level. Her ability to focus on a task has improved massively. Far less random gibberish is coming out of her. She is now capable of thinking how others would feel in her shoes and now plans for the future. Her random output isn't a Markov chain with a better dataset. The input from our world is changing the wiring up there in a way that no ML model is changed by its data.
As someone who has learned a 2nd language as a child and a 3rd as an adult, I also know personally that it's far more than the dataset alone.
EDIT: updated comment after re-reading the chain.
I have three young children and I have observed the same as you with your niece. However a lot of it is that as children learn cause and effect they are better able to optimize for their desired outcomes.
"smarter" is probably a poor choice of words. "more capable" at certain tasks then definitely. The sibling comment to this talks about identifying Legos. My four-year-old can do that because they now know Plato's form of the Lego because they observed me saying the word Lego while holding them to understand what that is. With enough observations I would think that a general purpose AI could identify the forms and then launch more specific AIs for the tasks.
Most devices we use are far better at doing their job than a human, which is why we use them. But even if they learn and improve what they're doing they are still only able to do that one single thing.
Also I noticed above that the misconception still persists that autonomous driving today is safer than human driving although it has been proven wrong [0]. It will come at some point but we're not there yet.
[0] https://arstechnica.com/cars/2019/02/in-2017-the-feds-said-t...