Why is this "Sie geht schell" rather than "Sie läuft schnell"? I feel like I'm missing something here
Look, I realize it's a bit informal but "She goes/walks quick." is just as commonly used as "She goes/walks quickly." Usually only in the context of directly remarking on something in the present form. One would not, I admit, use this in the past tense but we're quite clearly working in the present here.
This like "she goes quick" or "drive safe" are said often in North Amercian English, but they should end in "ly".
don't we use the ''Sie" also for formal speach. I think the phrase could also mean "you are walking quickly". Can anyone correct me if I am wrong please !
Sie is indeed the formal form of "you" in German (taught in a later lesson), however it conjugates the verb differently:
sie geht = "she walks"
sie gehen = "they walk"
Sie gehen = "you walk"
So while there are some situations where it's not clear whether sie or Sie is meant (due to it being capitalised at the start of a sentence, or spoken), whenever you see the verb conjugated in the er/sie/es form (usually ending with -t), it must be sie as in "she".