My daughter (aged 8) tries writing stories. She makes lot of spelling and grammar mistakes and always has a dearth of topics. How can I help her to continue her hobby?

I think you should sit with her whenever she is writing stories. And under your guidance she will improve. But I suggest, do not interfere with her imagination, just be particular in honing her writing skills, spellings and grammar. You can show her stories on youtube or the best thing is read as much as you can with her. When you go for shopping, make it a point to get a book for her. As much as she will read, she will nothing but going to improve.