I have not heard the phrase splendid imagination used as a common expression although it is perfectly acceptable to use. Splendid means very good and in your sentence would mean that someone is able to conjure many different things. She has a very good imagination is the same as she has a splendid imagination. Marvelous would be another term to use and means extremely good.

I have never encountered the phrase "a splendid imagination". If I did hear it, I would think that the person had thought of something particularly creative or helpful. A vivid imagination is quite commonly heard and seen in writing. This is slightly derogative. It means that the person is imagining things that may not be real. Usually such a person is fearful of the imagined item. And just a helpful correction " Is this phrase commonly used"

Not common. You might say someone has a splendid imagination meaning that they think of a lot of ideas or are creative. A vivid imagination is more common.