Large chainring to middle position, chain guard in outer position, chain keeper to help prevent chain being thrown. You may have to get a new BB to assure proper chainstay clearance while maintaining a decent chainline. As, without a lower front gear, your wife will be using the entire width of her cassette more (even in gently rolling hills) you want to keep your chainring lined up near the middle or just slightly to the outside of your cassette to prevent the ridiculous amount of cross chaining that would occur if you left it in the outer position. If clearance is a problem you can get a 44 tooth ring and something like an 11-28 cassette to give you a decent range of gears for fitness and cruising while still having fair climbing ability.
BTW, the chain guard is to prevent the chain from being thrown to the outside and also eliminates that "missing" chainring look. If your wife commutes or runs errands with the bike, she might appreciate the clean pants legs as well.