。
She can sing very well.
Literal
She [topic-は] very skillfully sing can.
上手に is the adverbial of 上手 ('skillful'), formed by adding に to a na-adjective — the standard recipe for turning a na-adjective into a manner adverb (静か→静かに, 自由→自由に). Pairing it with ことができる makes a textbook 'can do skillfully' frame; in everyday speech the potential form 歌える might surface instead, but the ことができる variant feels slightly more deliberate.