She lived all alone in a cabin.

Literal

She [topic-は] cabin [in-で] all-alone [in state of-で] was-living.

一人ぼっち adds emotional weight beyond plain 一人で — it emphasizes not just being alone but being lonely, isolated, without companionship. The double で here comes from two different sources: 小屋で uses the locative で (in a cabin), while 一人ぼっちで uses the manner/state で. 暮らしていた describes an ongoing past state of living — the ていた marks a habitual condition that continued over time, not a momentary action.