She plays the violin extremely well.

Literal

She [topic-は] very skillfully violin [object-を] plays.

上手に is the adverbial form of the na-adjective 上手 ('good at, skilled') — adjective + に gives 'in a skillful manner.' Note that for the 'play (a stringed/keyboard instrument)' verb, Japanese uses 弾く specifically for plucked or struck strings (violin, guitar, piano); wind instruments use 吹く ('blow'); drums use 叩く ('strike'). バイオリン is one of two katakana spellings (also ヴァイオリン, slightly more formal); the v-sound in Japanese is approximated by バ in casual usage.