'It's time she go' is incorrect because it's a fragment, it's an incomplete sentence. Not even in informal speech does it really make sense, it just comes off as awkward.

"Go/went home" gives us a destination, but just using the verb means "go away from here". In both cases, you're using a subjunctive verb form. The subjunctive past looks like the simple past, and the subjunctive present doesn't change from the base verb. In either case, the action is wished for or imagined. If you use "goes", then you mean the action exists in reality. So, "It's time she went" is common, regular use. I agree that the fuller sentence, "It's time for her to go" is much less awkward than forcing a present subjunctive.

set expression: it's (high) time + smb + past simple

Speaking and writing English is a lot like driving a car. If you're always looking for shortcuts when you don't need to signal before making turns, you won't be signalling when you should. Likewise, if you're looking for lots of shortcuts in spoken English, it will be harder to write English properly. Perhaps some native speakers would say, "It's time she go." or "It's time you go.", but that sounds like Tarzan-speak to me. That's like omitting articles (a/the) -- people will understand you, but that doesn't mean it's proper English or even accepted English for the large majority. I would say, "It's time for her to go" or "It's time that she goes". Yes, it's more words. Now, it's time for me to go :-)