I say it would be the second one because to show possession you have to have an apostrophe.
The voice of narrative tells whose eyes the reader sees a story through. When recognizing the story voice in literature, it is vital to think about the perspective and the storyteller's degrees of omniscience, objectivity and unwavering quality.
No, if they were preferred girl, and their body was a boy, it would be weird if "she" got ready in the girl's locker room