It sounds like she's in a vicious cycle. If her toddler is awake till 2 am, she likely would be exhausted if she herself tried to wake up at, say, 9 am. On the other hand, with the sleep cycle she's on, she'll find it very hard to have a social life or even get any errands done. And it must be quite hard, mentally and physically, for her to be entertaining a toddler at 1 am.
I myself have a child who is a night owl, and has always been like that. There is a little bit of heredity to it, I believe. My other children have reasonable bedtimes. (One of my children puts himself to bed at 9 pm every night, it's wonderful. He just says, "I'm tired" and goes to bed!) The night owl child could keep himself awake, seemingly by some sort of magical ninja power, until 2 am, no matter how little sleep he had the night before. No method worked, we worked with therapists and everything. So I completely sympathise with your friend.
One thing I found with my night owl was that he gave up nap a lot earlier than other babies. So by 18 months, any daytime napping would really mess up his nighttime sleep. Without nap, he was still awake very late (10 pm or 11 pm) but at least I was able to get him down before midnight.
I think she can still do softplay at the afternoon session that she likes, that will allow him to get some activity which might help him fall asleep earlier; it just means you won't be there.
Other things that helped me with my night-owl toddler were trying to expose him to the sunlight in the morning, to reset his biological clock (or at least to prevent it going too far off-course) and planning my day so that I could keep him awake during the time of day he would prefer to nap. That is, I didn't plan any chores that would take me away from paying attention to him at the time he was prone to napping, so I could sit with him and keep him busy during that time.
I think it would be hard for her to get a night owl child onto a 7pm to 7 am schedule, but maybe she could gradually shift his waking time backwards from 11 am, a half hour every few days, until he's waking up at 9 am. I think that would be sustainable and would give her a lot more options for her social life. It would also be nice for her mental health if she had a couple of hours free of child-watching at the end of the day.
I wonder if something she could try would be a nice morning routine outside that they could do together. Like a nice hot cup of cocoa in the garden (or on the outside step, whatever is available) and listening to some of their favorite tunes together. That might help him stick to a morning schedule.
I know I missed the point of the thread but if you can tell her this came from a mother who also had a night owl baby, maybe you'll be able to pass on some of those ideas without offending her.