A few things to check.
Read Peter White's thing
on bike fitting for non-racers.
Check that the points of contact (pedals, saddle, bars) are roughly correct.
Check that the cranks are not overly long for leg-size.
Assuming that the fit is within bounds , the issue is riding style.
You could video your wife Just Riding Along, from the front and the sides (after a few miles warmup) . Mark the knee joint with some coloured tape (crash-test dummy style). Mark the bike up as a reference (eg tape at 5cm intervals. When you play frame by frame you can plot the circularity of her knees from the side and the verticalness from the front.
Check that your wife is well balanced and sitting symetrical as possible.
Lose toe clips are probably a better idea than clipless until you sort this out. Forcing the feet into the "correct" position can lead to joint problems.
Check for bent cranks or pedal spindle which can rock the foot from side to side.
Check hips for any bobbing.
Thats about all I can suggest from interwebland. If this advice doesnt work, an experienced bike fitter (pref with some sports-physio background) may help.