。
That smell instantly excites her.
Literal
She [topic-は] that smell [because of-で] immediately gets-excited.
興奮する covers a broader emotional range than English 'excite' — it includes thrill, agitation, and (in some contexts) sexual arousal, with surrounding context disambiguating. Here で marks the cause/trigger ('because of that smell'). The verb is in the present tense, framing this as a habitual or characteristic response, not a one-off reaction. すぐに ('immediately') intensifies the speed: the reaction is reflexive, automatic. 臭い (kun reading におい) usually carries a bad-smell connotation; 匂い is the neutral spelling.