Referring to the candidate in a recommendation letter
You are writing on behalf of the applicant, and are supposed to be providing information that shows how well you know the applicant's strengths and weaknesses. That knowledge is more convincingly implied if you refer to the candidate by her name, rather than as "the candidate" or "the applicant."

Also, most good letters of recommendation I've seen actually refer to the candidate by her first name, rather than as "Ms. Doe."