En haut de la falaise, ma fille montre du doigt la mer.

French often puts a place expression at the beginning to set the scene first. Here, En haut de la falaise works like At the top of the cliff in English.

The basic sentence is:

Ma fille montre du doigt la mer.
= My daughter is pointing at the sea.

Adding En haut de la falaise at the front tells you where this is happening before the main action.

En haut de means at the top of, up at the top of, or high up on something.

So:

• en haut de la falaise = at the top of the cliff

It is a very common expression in French:

• en haut de la rue = at the top of the street
• en haut de la montagne = at the top of the mountain

Because the two expressions do not mean exactly the same thing.

• en haut de la falaise focuses on being at the top edge / upper part of the cliff
• sur la falaise simply means on the cliff

So en haut de la falaise is more precise here. It gives the image of someone standing up on the cliff top, looking down or outward.

In French, nouns usually need an article much more often than in English.

So you say:

• la falaise = the cliff

After de, that becomes:

• de la falaise = of the cliff / from the cliff / at the top of the cliff, depending on the expression

French does not usually drop the article here.
That is why de falaise would sound wrong.

Ma agrees with fille, not with the person who owns her.

Since fille is:

• feminine
• singular

the possessive adjective must also be:

• ma = my

So:

• ma fille = my daughter

This is true no matter whether the speaker is male or female.

Montre is the present tense of montrer.

Here it is the third-person singular form:

• je montre
• tu montres
• il / elle montre

In a sentence like this, French uses the simple present where English often uses the present progressive:

• ma fille montre du doigt la mer
• literally: my daughter points at the sea
• natural English: my daughter is pointing at the sea

Montrer du doigt is a fixed expression meaning to point at something or someone with your finger.

So:

• ma fille montre du doigt la mer = my daughter is pointing at the sea

By itself, montrer often means to show.
But in the expression montrer du doigt, it specifically means to point at.

Because montrer du doigt is an idiomatic expression.

Here, du is the contraction of de + le:

• de le doigt → du doigt

Even though it literally looks like of the finger, the whole phrase means with the finger / by pointing.

French prefers the set phrase:

• montrer du doigt

rather than:

• montrer avec le doigt
• montrer son doigt

Those are not impossible in all situations, but they are not the normal way to express to point at.

Yes, that is understandable and grammatically possible. But montre du doigt la mer sounds more natural because it keeps the fixed expression montrer du doigt together.

So this version is very idiomatic:

• Ma fille montre du doigt la mer.

You may also hear:

• Ma fille montre la mer du doigt.

But learners should probably remember montrer du doigt as one chunk.

Again, French normally uses an article before nouns.

So:

• la mer = the sea

English sometimes drops articles where French does not, but in French a bare noun like mer would not work here.

Also, in this sentence the speaker is referring to the sea visible in the scene, so la mer is completely natural.

The comma separates the opening location phrase from the main clause.

So the structure is:

• En haut de la falaise, = setting/place
• ma fille montre du doigt la mer. = main statement

It is similar to English:

• At the top of the cliff, my daughter is pointing at the sea.

In speech, there may be a small pause there. In writing, the comma helps make the sentence clearer.