It's a way to convey what the person was saying, but also more non-verbal aspects of how the person was acting/speaking, etc. People also will say 'he/she was like...'

“She goes . . .” or “he goes . . .” is just informal slang for “she said . . .” or “he said. . .”

Yes, people do talk that way. What you are describing is not "reported speech". Rather, the speaker is simply shifting his time frame. For example, a man might say: "Yesterday I was in the grocery store and I *SEE* this man stealing vegetables. I *AM* like 'whoa, you can't do that!' I *GO* to the store manager and *TELL* him what I saw. Then I left the store." This is not the best of English, but it is common. The speaker is making a mental shift. He starts his sentence in the present moment. Then, INSIDE HIS BRAIN, he switches to the past. He starts speaking to you FROM THE PAST. Then, in his last sentence, he switches back to the present. Don't ever talk this way in situations where accuracy is important. If the police officer asks you questions about the crime you witnessed, avoid colloquial language and use the correct tenses.

for intensification like "see it with your eyes" here she goes -- about Queen Victoria

There are many ways to convey someone talking in the past. People from different areas/ages say it differently. He/she goes, he/she says, he/she was like, he/she said… i dont hear he/she goes as often as the others. It depends on the context of he / she goes .