She was crying in her room.

Literal

She [topic-は] her-own-room [in-で] was-crying.

自室 ('one's own room') is a tidy compound — 自 ('self') + 室 ('room') — that doesn't translate one-to-one into English; we'd typically say 'my room / her room' with a possessive. The で marks the location of the activity (crying). The past progressive 泣いていた describes the crying as a sustained state encountered or observed — perhaps the speaker came across her in this state — rather than a single point of crying.