That's definitely a keeper. The bike is nice, too.
Yes, you can put virtually any kind of handlebars on the bike. Shifting should be easy since she has stem shifters which are independent of the handlebar setup. You'll basically need new handlebars, grips, and brake levers. If you can find handlebars that have the same clamp diameter, you're all set. If you can't find handlebars in a style you want, you can get a quill stem adapter and use a modern stem.
She may decide that a racing seat isn't quite what she wants if she is putting more of her weight on the seat. I would recommend something
like this.
Here is an example of what I did with one of my bikes:
Before:
After: