Oh! Oh I like this discussion! What "is" and "is not" art is a question that will
never have a definitive answer, and people who challenge the accepted norms are always the ones who make the biggest waves. Analyzing art is an exercise in critical thinking, and that is always good for the brain muscle. Even if the conclusion is: this art sux.
I feel I need to address something that has rubbed me the wrong way before I contribute, however. Twigster, I cannot fairly judge your comment about digital art without seeing what kind of experience you have with it. But for myself - a person who draws and paints both digitally and traditionally - I don't see where you can reason that "the program does everything for you" and that working digitally is
not "using your hands to bring something to life". A digital program is a tool, just like a paint brush or pencil. Both take discipline to use effectively. A person can use a warp tool, or add a sepia photo-filter, or overlay, or automated sun glare.... and have horrid results. (Not making assumptions about the pic of your niece, incidentally. I'm generalizing.) My computer knows nothing about composition, or color palate, or what the "rule of thirds" actually means (despite the fact that it gives me a handy grid when I am using the crop tool) and when and where I want to use those things.
The computer is a medium through which an artist expresses their work - like choosing a ballpoint pen over a pencil and eraser, or acrylic over oil. And like all mediums has it's strengths and drawbacks. For example: if I want a glaze in photoshop I don't have to wait 5 to 24 hours for the oil to dry; I can just add a new layer with a special blend mode. But I
can't make the paint run or use drips and scratches like I would with oil without resorting to cheap imitations that don't have the same impact. It is completely fair to say you admire the labor that has gone into a piece of traditional work, and enjoy it for that reason. Oftentimes the process is as much part of the art as the end result (and I sometimes explore this notion in my own work). But saying something does not qualify as art because it was done on a computer is..... well, a bit hurtful.
Inversely, the quality of the work is not dependent on the labor involved in it's creation. I would like to point out that it usually takes me considerably longer to complete a digital illustration (sometimes 40+ hours), than it does an "a la prima" oil painting (like 3 hours tops) that I could sell for a couple of hundred bucks in a gallery.
All I'm saying is.... open up your miiiiiiind!

Wow. That was longer than I intended. And a bit of a rant (sore point, much?) To avoid an even longer wall of text, I will come back in a new post with some actual artwork to talk about.