Either by birth or conversion. If your brother's fiance wants to convert it should be done before the wedding or else it will not be an authentic Jewish wedding.
You should not help your brother disrespect the Jewish religion or people by blatantly breaking it's laws and traditions. The problem is that Jews today are too inclusive and this has weakened Judaism to a breaking point. The Rabbi you spoke to is part of the problem.
If your brother's fiance does not want to convert than they should not get married by a Rabbi. They will never have a Jewish wedding if she doesn't. I'm guessing that this is a ploy by your brother's fiance to make your parents feel better about her. If she really wanted to convert to Judaism she would have done it already.