Both the weight distribution and hand position arguments sound right to me. You don't want too much weight on the bars, nor do you want her stuck in one hand position. Certainly don't want both problems.

Nashbar moustache? I'd advise against it. They're steel and very stiff. Steel makes them affordable and bulletproof, but they're not comfy. I rode those bars for 3 yrs on my frankenbike commuter, and found that I had to increase tire size to compensate for the bars' stiffness. Even at the most outboard hand position, they don't "give" like aluminum. It looks like her current bars don't, either, which probably isn't helping.

Hand position: I once rode a 2-day 150 miler on a MTB with rock-hard slick tires and only one hand position. It was no fun at all. Numbness? You betcha. Leave the single-position bars for the urban hipsters, and make sure your wife has at least 2-3 good hand positions. And by good I mean significantly different, e.g. hands parallel to top tube and hands perpendicular to top tube.

(That's another area where I didn't like the Nashbar moustache -- the forward bends were too round for me, after years of anatomic drops, and I found myself more resting my hands there than gripping. Only the outboard position on the straight part of the bars is really comfortable to grab.)

Finally, if she's only 5' and is in love with cycling, try finding a dealer that sells women-specific bikes. As far as I know, Terry is still highly regarded. They've got a number of bikes built on smaller wheels that should fit much better. They're not cheap (not titanium roadie expensive, either, at least not all of them), but I think that might be your best bet for something she could really enjoy. Folding bikes with even smaller wheels (like Dahon's) have the potential to fit better, too, but if I recall correctly, those tend not to offer different sizes, so I expect they would all have the same reach problem as her current bike.

Good luck.