Correct Answer: She wished that she could fly like a butterfly.

Solution : The correct choice is the second option.

Reported speech involves conveying what someone else said without quoting them directly. When converting direct speech to reported speech, there are typically several changes:

Narration Conversion:

• The first- pronoun I in the direct speech changes to the third-person pronoun she in the reported speech to match the subject of the reported clause.
• Said becomes wished, as it is an imperative sentence.
• That is used to introduce the reported clause.
• Quotation marks are removed.

Therefore, the reported speech is: She wished that she could fly like a butterfly.