What did the bike shop say?
My daughter is 140cm and my wife is 161cm. Both ride the same sized frame with 26" wheels, but my daughter's has a stem shorter by 30mm and the saddle is lower. Both use riser-bars but different sweep and height. Given their height difference is about 20cm (8 inches) and your wife and son are 7 inches, you might just be ok. Depending on their reach, you may have to change the stem to one they can both use.
My daughter's bike will of course be able to adjust accordingly with her, as she grows.
This is what it looks like...
