Hi and welcome to the forum!
I am posting a photo of the 7-8mm Freshadama strand I bought from PearlParadise.com in November; I specified silver rose overtones and I bought this clasp because it is easy for me to manipulate and I love the look. It looks too large in the photo but not in person-- it's not really so very big.
1. I really would go with the Freshadama strand. Since they are her first, she will love the fact that they will last and last and no bead will ever be exposed (the nacre of Akoyas wears out over time.) It would be so disappointing if her first pearls wore out!
2. Personally I like 18" better than 16", but some like 17"-- this may actually be better since your wife is petite. PearlParadise.com can customize your order.
3. I am 5' 4 1/4" and medium build and I think this size pearl (7-7.5mm) would look just fine on someone 5'1", but if she likes larger pearls, 8-9mm would look great as well (but there is a significant price jump.) They would not look too big, no.
And the earrings are 8-9mm.