My dd has jsut turned 8 and has been terrified of characters since her first visit when she was 22 months old.
For your character meals just ask your server where the character will stand at the table and put your dd as far away from there as possible. We always have my dh inbetween my dd and any character. Our first morning one year was in Crystal palace and she screamed and screamed and I thought OMG what a holiday we will have, but with a bit of reassurance and the promise that the charcaters won't touch her she did calm down, never went close to them but did tolerate them

We did get family pictures with characters but my dh had to lift her and one of my ds's had to stand inbetween them and the character, but of a military operation to get the perfect picture

My dd has always liked the "face" characters though, all the princesses, peter pan etc, its just the fully costumed ones she doesn't like.
We have now just accepted this is the way she is and to force her just spoils everyones day. Good luck xx