With the 2nd, you are not so much asking WHERE she is, but more indicating your UNCERTAINTY where she is. So with the first you want to know her location, with the 2nd it is more about 'wondering' or showing your doubt where she is, rather than explicitly wanting to know where she is.

There's not a big difference. "Where is she?" is definitely more common. When I hear "Where could she be" I think of a person who's worried/mad/frustrated wondering where the person is, why are they late, why can't I find her. For example, a mom who is worried that her daughter is late coming home would say "Where could she be? She was supposed to be home at 6." Or for more emphasis "Where ON EARTH could she be?" Or another example, I can't find my car keys. I'm irritated. "Where could they be?!?! I've looked EVERYWHERE!!" I'm a native English speaker from the USA.

"Where could she be?" is more of a rhetorical question (a question that does not necessarily need a response). It's more of a thought to oneself (whether in your mind or spoken out loud), but could be asked to another person who is also in search of her so that maybe the two people who are looking could share ideas of where they think she is. "Where is she?" is more of a direct question to elicit a response from someone. For example, if you know that someone has taken her somewhere, but you do not know where, you would say "Where is she?" rather than "Where could she be?" "Where is she?" could really be used in either scenario, but "Where could she be?" makes sense only in the first scenario.