She makes me happy.

Literal

She [topic-は] me [object-を] happy [into-に] makes [for my benefit-てくれる].

The pattern X を Y にする ('make X into Y') turns a な-adjective or noun into a productive change-of-state expression — 部屋をきれいにする ('make the room clean'), 子供を医者にする ('make one's child a doctor'). Here 幸せ ('happiness, happy') is the target state. With the benefactive ~てくれる layered on, it becomes 'she makes me happy (as a gift to me)' — a stock romantic phrase, common in songs and confessions.