Residents in Withernsea and near the crash site have spoken of their shock after the accident and sent their best wishes to the girl.
Diane Stothard, who runs jewellery and bag shop Shehrazade in Withernsea, said she was told of the crash after her brother drove past the junction on Sunday.
She said: "It's devastating to hear it involved a mother and young toddler, who is in a very bad way.
"It's very sad news for Withernsea and I had heard about the crash as my brother Graham was leaving a christening in Burton Pidsea.
"He said the road was shut off and it looked very serious. I just hope the little girl pulls through.
"There have been a few car crashes and my friend was involved in one a couple of days ago.
"She hit a grass verge and was told if there had been a passenger in the car, they could have been killed."
The two-year-old was taken to Hull Royal Infirmary, before being transferred to Leeds General Infirmary, where doctors are working around the clock to save her.
Residents said there have been previous accidents at the junction, and there is a 30mph speed limit heading into Neat Marsh Road.
Marian Rose, landlady at the Nags Head in nearby Sproatley Road, said a lot of traffic passes through and it can be "frightening" if they are speeding past.
She said: "We don't know what has happened in this case but there have been other accidents.
"It's terrible that a child has been involved in this crash and I'd heard from people that she was unconscious when the police came.
"Customers came in the pub and said it happened at the crossroads and we hope she gets better soon."
East Riding councillor Ann Suggit said it was "terrible news" for the daughter's family.
She also has concerns about the area near Sproatley Road and said she will be looking into the issue after previous accidents.
Councillor Suggit said: "It's dreadful for the child and her family and those involved in the crash.
"It's a bit of a bad area and it doesn't surprise me that it has happened on that junction.
"My thoughts go out to the mother and her family."
Anyone who saw either car immediately before the collision or who saw the crash itself is asked to contact Humberside Police on the non-emergency number 101, referring to log 316 of July 14.
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