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What is the password of 'HER NAME' file? I thought the password would be the witch's name, but it wasn't. Isn't this file extra content or something?

The answer can be found as part of a hidden, optional puzzle. The reward is small. Do not feel obliged to solve it unless you simply want another puzzle to solve.
But if you are undeterred. You want to find her full name.

I found that puzzle at the hero's memorial, but I still don't get it. How do I choose correct 7 letters among those 21 letters?? Is there another hint in the game? Or does it have regularity itself?

Oh never mind. I solved it

I'm happy you figured it out!
The game is about overcoming difficult adventuring puzzles. The reward is seeing the puzzle become solved after being stuck on it for a while. For that reason, I couldn't give any hints, because that would go against the spirit of the game. It's all about the puzzles.
Thank you for persevering!