天帝の娘ではたを織るのが上手だったおり姫と牛飼いのひこ星はおたがいに好きになり、結婚する。
??? Princess Ori, who was skilled with the weaving, and Hikoboshi the cowherd come to love each other and will get married.
Now, I'm assuming that the で in bold somehow tells us that Princess Ori is the daughter of the Sky King. But, this doesn't fit with my usual understanding of で as either a location marker, 'by means of', or て-form of copula.
Have I understood the meaning correctly? Can you please give some more examples of how/when I should use で in this way?