Congratulations to your daDD! You should both be very proud. My DS was awarded an ISR this past fall and will be starting his journey next month. I've read several threads on this topic and it seems recruiting districts approach these ISRs one of two ways. One is that several candidates are recommended to the CO to interview and he/she selects the candidates he/she wants to award the ISRs to. The other is that by the time the candidate has been told they are being considered, the interview with the CO is basically a formality. My DS's was the latter. I accompanied him to his interview. The CO asked if I wanted to sit in on it. My DS said he was fine with me being in there so I jumped at the chance. I sat (very quietly) on a couch behind and off to the side. The interview was very low key; more of a get to know you thing and making sure my son would definitely use the scholarship. Right up front the CO told my son to relax, the scholarship was his. From what I have read the ISRs used to be awarded just based on test scores, but now that are often awarded to very desirable candidates who may not otherwise be awarded a scholarship. I suspect the latter may be the case for your DD, seeing as she is an LREC applicant and only 15% or so of the scholarships are awarded to non-tier 1 or 2 majors. If she is already studying Arabic abroad on a State Department scholarship, I'm sure she is an amazing candidate. I totally agree with
@5Day. She should not stress too much, go in like she did to her initial officer interview and when she has this interview, she will have even more to talk about and offer to support her application.
As far as the second part of your question, if she does not get into the school where her scholarship is assigned she can request to have the scholarship transferred to another school, even if it was not on her initial top 5. Info on how to do this will be on her portal and in the documents that are mailed after the scholarship is officially awarded. A word on that, it could take a couple months. The board still has to review your DD's application and make the official award. My DS was told he got the scholarship in early September, but I don't think it was officially approved until the November board.