I would drop the daytime bottles down to 3, so she has one at wake up, one just before her afternoon nap and then at bedtime. With this routine you will need to do lunch a bit earlier and tea a bit earlier and she should take more in her day bottle and bedtime bottle. I did this with my DD at this age to increase her milk intake and then we dropped the nightfeed.
I would actually start reducing the nightfeed an oz every 3 days when her day intake has increased a bit. I didn't water down my DD's, we just reduced by 1oz every 3 nights and then just offered water by the time it got to 1 or 2 oz. I think the trouble with watering down is that they are still having a volume of liquid filling their tummies whereas by dropping oz gradually you are giving them less and less overall volume. You will get some protesting when you get to resettling with just water but you need to stick to it for a couple of nights while she gets used to a new way of doing things.
What do you think?
Laura