"She is reading a nice book."
Translation:היא קוראת ספר יפה.
In Hebrew, you always put the adjective after the noun. So you would write: She reads book nice.
היא קוראת יפה = She reads well
Yafe in the original sentence refers only to the book, not to the she.
No - קוראת (kore'et) is the singular female form. if you add a "ו" it becomes plural: קוראות (kor'ot).