she thought life in the small town was monotonous.

之所以省略that ,是因为,这是一个宾语从句,life in the small town was monotonous是thought 的宾语从句,可以省略that
在这个宾语从句中,life 是主语,不存在主语从句,因此可以省略that
再问： （she thought life in the small town ）was monotonous.
为啥不是这么看
再答： 如果，你非要理解成主语从句，则是这样：
what she thought was that life in the small town was monotonous
think 是不及物动词，因此主语从句的连词是what

后面was that 是一个表语从句，表语从句的that 是不能省略的

“（she thought life in the small town ）”为什么不能单独做主语，因为，think是不及物动词，不能这么直接跟宾语的life