How to prove Canadian residency at the border

Using your daughter's home address is fine, we use our oldest son's with no problem however ALL our documentation (driver's licesnce,passport,insurance and such) all have the same address. Every time we've crossed at the Ambassador bridge we've been treated with utmost courtesy and respect from the US customs officers, when at the booth have your passports in hand, take off your sun glasses and hats, answer all questions concisely and clearly, know exactly where your going and how long you will be in the USA,they will probably want to have a look inside your RV,make sure your not bringing anything across that you shouldn't and after a short time you'll be on your way. Good luck.

We always take a property tax bill with our name and address on it. One time the officer at the boarder asked all kinds of questions about our Canadian connections. Finely he asked us did we own or rent our condo when I told him we own he let us go. We then decided if they try that again we would be ready for them.
I would make sure that your drivers and vehicle permit have your Daughter's address on it. The last time we crossed I was asked if I had the permit in the motor home for the car I was pulling. I told her it was in the glove box of the car. She went back and checked the plate and checked her computer then told us we could go. They just ask all kinds of questions to make you nervous if your hiding something.

The OP is correct to have some concerns. If you can't show proof of Canadian Residency, you can be denied entry in the US. I can't imagine you'd have any issues with the place being a one bedroom apartment but you do want your DL, insurance, etc all using that address. Unless you really look suspicious (in which case they could just refuse entry because they felt like it anyway so it's a moot point), I don't think they would (or even could) check what kind of place it is.

If you intend to be in the US for a substantial amount of time, i.e. longer than 120 days each year on average, don't forget to complete the 8840 form to avoid possibly being dinged with fine. Also be aware that even if Ontario permits you to be away 7 months a year, the US limit remains 182 days after which you may be subject to paying US income tax to the IRS.

http://www.irs.gov/pub/irs-pdf/f8840.pdf

All you need is a passport.
I would be more worried about medical coverage. You're covered for seven months out of province. Comes a time you may have to prove residency for coverage.

My parents always carry things like phone bills and bank statements etc...

Pass port and drivers license should satisfy them.

Crossing U.S. Borders

Canada Border Services

Guess your passport would solve that issue.