What effect does finally seeing daisy's little girl have on gatsby, and why do you think the author made it a point to have gatsby see her?

Gatsby has basically surrounded his life by winning financially and winning daisy back from Tom. He thinks of Daisy as the 'ideal woman'. He thinks they are meant for each other. When he finally confronts Daisy and Tom, he wants Daisy to tell Tom she never loved him. He wants her to break off any ties made with him through their 4-year relationship. But, when Gatsby sees Daisy's and Tom's daughter, Pammy, he is brought to this idealism. Pammy is living proof of Tom and Daisy's relationship. Pammy probably isn't brought to Gatsby's attention right away because it is part of Daisy and Tom's life that cannot be erased. In seeing Pammy, Gatsby is disheartened because reality finally hits him. Daisy and Tom are married, therefore, Gatsby and Daisy cannot exist.
"Gatsby and I in turn leaned down and took the small, reluctant hand. Afterward he kept looking at the child with surprise. I don't think he ever really believed in its existence before."

I think indirect characterization. Look at the definitions below.  

Explanation:

Indirect Characterzation: Indirect characterization is a method of indicating what a character is like by revealing their personality through descriptions of their actions, speech, appearance, and interactions with other characters.

Direct Characterzation: Direct characterization is a method of indicating what a character is like by directly stating their personality traits.

Character Characterzation: Characterization is the process by which the writer reveals the personality of a character. Characterization is revealed through direct characterization and indirect characterization.