Can I say woher ist sie? and would the answer, for instance, be sie ist Deutsche or sie kommt aus Deutschland
One can say in German "Woher sind Sie?" or "Woher ist sie?". The slightly more idiomatic way to phrase it is "Woher kommen Sie?" or "Woher kommt sie?" (Where are you from? / Where is she from?). This question is somewhat ambiguous and can intend to ask for the heritage or ask for the previous stop on a travel; context should give away which of these is meant.
Correspondingly the answers as you write are also correct, though they IMHO have a slightly different meaning:
Sie ist Deutsche --> She is German (= has German citizenship). This however does not necessarily mean that she lives in Germany or comes or traveled from Germany.
Sie kommt aus Deutschland --> She comes from Germany. This does not necessarily imply citizenship; and can also be the correct answer when asking anyone who just travelled from Germany to whereever.