1. I would use "thrives" and adjust the phrasing slightly "She showed that she thrives on challenging situations" or if speaking of a specific situation: "She showed that she thrived on the challenging situation" 2. "can thrive" suggests the potential to thrive, but what we want to say is that she does thrive. "chips were down" is past tense, but we're speaking in the present tense. "We realized that she thrives when the chips are down."

Yes, they are OK. 1 would probably be more natural with the plural 'situations' 2 seems not quite perfectly natural, but it is OK. I think perhaps I would use 'could' rather than 'can'.

Thank you.

First is fine, but can be improved with 'could'. 2nd sounds awkward for me. I'd replace 'can' with 'could'. 1. She showed that she could thrive on a challenging situation. 2. We realized that she could thrive when the chips were down.

*Do these sound natural?