Learn English – What does “She’s nice to see and she’s soft to touch” mean

I read a following poem in Les Miserables.

There is a castle on a cloud,
I like to go there in my sleep,
Aren’t any floors for me to sweep,
Not in my castle on a cloud.

There is a room that’s full of toys,
There are a hundred boys and girls,
Nobody shouts or talks too loud,
Not in my castle on a cloud.

There is a lady all in white.
Holds me and sings a lullaby,
She's nice to see and she’s soft to touch,
She says "Cosette, I love you very much."

I know a place where no one's lost,
I know a place where no one cries,
Crying at all is not allowed,
Not in my castle on a cloud

— Les Miserables Musical – lyrics by Herbert Kretzmer

I have two explanations of "She's nice to see and she's soft to touch":

1. When she sees me, she is nice and she touches me softly.

2. I see her and she is nice and I touch her and she is soft.

I don't know which explanation is right and how to parse this sentence.