RSA: What would happen if you chose n to be a prime?
How would Bob decrypt her message?


That'd be easy, all we would need to assume that Bob has the public key.  If $n$ is a prime, he is able to compute $d = e^{-1} \bmod{\lambda(n)}$, because $\lambda(n) = n - 1$.  He can then raise the ciphertext to the $d$th power modulo $n$, and that's the padded plaintext.

Since anyone with the public key can do this, RSA based on a prime modulus is insecure.