1) Yes, the issues have been fixed. They mostly affected G19's, but Gen 3's also had their own issues. If you happen to get an older one, Glock will fix it for you anyway. It's essentially a non-issue, at this point.
2) No, a Gen 3 barrel and mag will work in a Gen 4 gun. The only things that don't work are mag releases, recoil springs (though Lone Wolf makes an adapter for Gen 4 guns to use Gen 3 recoil springs), and some aftermarket stuff. Chances are, if you want it, they make it for both Gen 3 and 4.
3) Very much so. The Gen 4 guns come with a shorter (front-to-back) grip, a backstrap that brings it to the Gen 3 size, and an even larger one. They also come with a larger mag release. These two are HUGE improvements for a lot of people. Your wife will likely appreciate the smaller Gen 4 frame. The grip texture on the Gen 4 is also much better than that of the Gen 3, in my opinion. For me, the factory beavertails and grip texture make all the difference in the world. I have big hands, and will occasionally get slide bite on Gen 3's/naked Gen 4's, so getting the beavertail really helped me. I'll never buy another Gen 3, I like the features of the Gen 4 that much. Oh, and the Gen 4's come with 3 mags, the Gen 3's come with 2.
If you like the way Gen 3's feel, go for it. But if you like the Gen 4, then don't worry about the issues reported by the earlier Gen 4's.