This apparently accidentally went unanswered for three years, but yes, that is accepted. :)
"She is a true lady" seems like the same to me, perhaps it should be added as a correct answer?
There's a better translation for this in Hon är en sann dam, but I'll add it on both sides since it's pretty close.
en dam is 'a lady' and 'a woman' is en kvinna. Some variants of English use 'lady' for both, so we generally acccept 'lady' as a translation of kvinna. But the other way round is not acceptable. If it's en dam in Swedish, it should definitely be 'a lady' in English.
Way to remember this: In England, "Dame" is a proper royal knighted title for a lady of distinction ... e.g. "Dame Judy Dench".
It would mean "she is very much a lady". That is, she definitely possesses the qualities that separate a lady from a woman.
Ah, for correct I think actually korrekt is the best Swedish translation. There's a difference in meaning between that and riktig/real.
Are there any cultural differences between using the terms kvinna and dam? For example, lady can sometimes be quite a loaded term in English due to the connotations of chivalry, it can also be seen as a patronising term in some contexts. Does any of this carry over into Swedish culture or are they interchangeable terms? Are there also any age related usage to the terms (Calling older or younger women ladies)?
dam isn't really used in any context that isn't meant to be formal or extra polite. It's much more comparable to "gentleman" than to "lady" in that regard, since it doesn't have the potentially patronising connotation. (Or at least no more so than any other similar word said sneerily.) Both dam and kvinna are perfectly neutral, though.
You would also be much more likely to use dam as the age of the person goes up, as you probably guessed.