A lower priced mountain bike would work well. Trek, just for one example, offers models for both men and women in a variety of sizes. That means your wife can get a "good fit", which is essential for fully enjoying a bike.
For street use, there are light weight "slick" tires that work very well. Many urban messengers use a MTB with slicks for the combination of dependability and easy rolling.
As a bonus, the high numbers of MTB's sold mean that a MTB with a "street" price of $300 will be will made and reliable. Usually a few things need adjusting and tightening after the first hundred miles or so, and after that, an MTB can go along time with nothing by air in the tires and chain oil.