"She reads me her book."
Translation:Ella me lee su libro.
As far as I remember, you can define a pronoun to something that substitutes the noun, right?
therefore if you use the pronoun, you have to leave something out. Here, if you want to use "lo" you would say "Ella me lo lee" However this is not the translation of the original sentence because lo does not convey the full information. Pronouns are normally used to reduce the length of the expression when part of the information is already known to the speakers.