That's the key. NATO would not necessarily be obligated to respond with military force, except as a last resort. Economic sanctions, covert aid to resistance members, diplomacy etc. would be alternatives to all-out war.
Yes, and that is exactly what she said to Gibson:
“It doesn’t have to lead to war and it doesn’t have to lead, as I said, to a Cold War, but economic sanctions, diplomatic pressure, again, counting on our allies to help us do that in this mission of keeping our eye on Russia and Putin and some of his desire to control and to control much more than smaller democratic countries.”