。
It seems she was happy.
Literal
She [topic-は] happy was [seems-ようだ].
~ようだ ('seems, appears') marks inference from observation, situation, or general sense — slightly more committed than ~らしい (hearsay) and a step less direct than ~だ. The embedded past 幸せだった preserves her happiness as a past condition; the matrix ようだ is the speaker's present judgment about it. The whole frame is a stock construction for retrospective inference: 'looks like she had been happy.'