It not only looks fake, it looks scary-fake. While it's impossible to tell, really - could be just a very poorly lit picture - the possible bruises on the last two fingers also rather resemble cigarette burns. And her face - that's much more a grimace than a smile.
And, while I'm no big believer in "body language," the crossed arms do suggest a protective shield - this is from a page on the positioning of arms in re: reading body language, link below:
"When they are crossed, they form a closed defensive shield, blocking out the outside world. Shields act in two ways: one is to block incoming attacks and the other is a place behind which the person can hide and perhaps not be noticed."
You're right, the background appears to be an Olan Mills-like photographic backdrop. Good call on this pic, little726! Madyson looks terrified and possibly brutalized.
http://changingminds.org/techniques/body/parts_body_language/arm_body_language.htm