Agree with the above...although I believe people were being a little harsh.
I think the biggest obstacle in her application is/was probably the having to take Step 1 twice.
OP, it sounds like you still have >>1 year left in med school, and several months before you have to apply. I think you should concentrate right now on trying to figure out which specialty you want to apply to. Usually it is better to apply to just 1, though occasionally people apply to more than one. It wouldn't be that crazy to apply to both IM and fp, if you really really wanted one particular city, but I wouldn't advertise that fact to anyone interviewing you, because it does make you look like you aren't committed to their specialty. So if you can, try to decide between psych/fp/IM. Also, make sure you pass the Step 2 on your first try, so probably want to take a reading elective or very easy rotation the month before that. Also arrange 1-2 subI's in the specialty (or specialties) you are considering, and make sure you do well on those. A lot of internal medicine is just taking a good history and physicial, and then following up on the details (your patients labs, imaging studies, etc.). I don't know what advice to give for psych.
One thing to think about when deciding on a specialty is what kind of patients you like seeing and how do you envision your career after residency. I think one thing to realize with IM is that a lot of patients are older (particularly in inpatient medicine) and have a lot of comorbidities. It's hard to "fix" people sometimes. Also you will have to do several ICU months during residency, which for some people is stressful (well, for most of us...) and if you want to do primary care later, such as all outpatient medicine, may not be that necessary. For family practice, you have to deal with trying to know a large number of things (OB/Gyn, peds, and medicine) but on the other hand it's a good specialty to have for job hunting (lots of places want to hire outpatient primary care docs, urgent care doc that can see both adults and peds, etc.). Also, they tend to have on average in their clinics, more of a mix of some healthier, younger patients along with the usual internal med patients who are over 50 and somewhat decrepit. My general impression is that fp residencies tend to be more chill, although you do have to deal with the phenomenon of often being the "off service" intern who knows less than the others. My impression is that most fp residents take less call and do more outpatient months than we did in IM.
Psych is a good specialty if you like talking to people and want to have good work hours when you are in practice. They are one of the few specialties that can/could sometimes still set themselves up in a private practice type setting, with renting or sharing an office with other docs, and not have to necessarily be someone's employee...unless they want. Also, when in practice they tend to work fewer hours than IM and fp docs.
I do agree with not limiting yourself to 1 city. I feel like if you pass Step 2 the first time and concentrate on doing well on your sub-I's, I don't see any reason why you won't match unless you limit yourself to too few programs.