。
She decorated her room in bright colors.
Literal
She [topic-は] her own room [object-を] bright colors [with-で] decorated.
The で here is the instrumental で marking the means or material — 'using/with bright colors.' 飾る ('to decorate, adorn') typically takes a place as direct object (を) and the decorating means via で. The plain past 飾った presents this as a completed event; the choice of bright colors implies a cheerful or assertive aesthetic — and a deliberate styling decision.