The monarchy is completely bloodline based as have monarchies throughout the centuries in Europe. The Queen is not 'English' or 'German, she is descended from people who have sat on the throne of Great Britain and Northern Ireland.
Well, not really. All throughout English and British history, the line of succession ("bloodline") has been ignored and overruled, and the crown has been illegally seized through violence.
William the Conqueror (the first in what's considered the 'official' line of monarchs) was a foreign invader who took the crown by force, after killing the rightful king.
A century (and an entire civil war fought over succession) later, his great-great-great-grandson Richard I died childless. According to the laws of succession and bloodline, the throne should have passed to the son of the next oldest brother. However this was an unpopular choice because the boy had a French mother, so the youngest brother King John was crowned instead.
200 years later Henry Bolingbroke deposed and imprisoned the rightful king Richard II and illegally crowned himself King, one of the most significant acts in English royal history since it challenged the concept of Divine Right of Kings (i.e. the belief that royals are directly anointed by God).
Henry VI was overthrown, kidnapped, and killed by his own cousin Edward of York, who crowned himself king, and of course when he died the throne passed not back to the rightful 'blood' line but to Edward's younger brother Richard III.
Not even gonna touch the whole "did Richard III kill the two York Princes in the tower because they were the rightful heirs" thing.
Then Henry Tudor sailed over from France, overthrew and killed Richard III in battle, and crowned himself king, even though his "blood" claim to the throne was extremely weak - his mother was the illegitimate great-granddaughter of John of Gaunt, the younger son of King Edward III. The only reason Henry Tudor got away with it was a) everyone else was dead b) he legitimised his crown by immediately marrying the York Princess, uniting the Houses of Lancaster and York and finally ending the most bloody and destructive civil war in English history. And even then Henry Tudor had to survive numerous attempts to challenge his right to the crown, and basically had to murder a shitload of people who either challenged him, or had a stronger blood-claim to the crown than he did.
When Queen Anne died childless, parliament passed the Act of Settlement 1701 law, which meant that 48 immediate blood heirs in the direct Line of Succession were skipped over because they were Catholic, and after much debate and fighting between the Whigs and Tories, they selected a distant German cousin to be the new monarch. All the current royals are descended from him.
If succession went purely by blood, then those 48 people and all of their descendants would be ahead of the House of Windsor. Hell if you go strictly by blood descent, the numerous descendants of John of Gaunt are all ahead of the Windsors.
Elizabeth II would be like 1567th in line for the British Throne - and would probably be an ordinary German woman - if not for anti-Catholic laws.