Change 700c rim to 650c

Changing to a smaller wheel may cause other problems, such as needing brakes with a longer reach (that won't work as well), or the bottom bracket is lowered, so the pedals may ground around corners.

This bike is super small already - the fundamental problem is, as you have guessed, the wheel size, which governs the dimensions of the frame.

I would be looking at a bike with 26" wheels, or even 24" - they generally didn't make road bikes with these wheels, so you might need to adapt a mountain bike or a kids bike. It is quite possible to put road bars and gears on these frames.

When you say "the frame is too high", what exactly does that mean? Can your wife stand over the top tube with at least a few centimeters of clearance? If so, then the bike is probably the right size. Many new riders expect to be able to put a foot flat on the ground while seated on the bike, but that requires a very low (and inefficient) seat position.

Also, check what shoes she's wearing when she tests the bike. Running shoes have much thicker soles than flip-flops. She should test the bike wearing whatever shoes she would normally go for a long ride in. I've seen cases where the bike didn't fit because the rider was wearing thin-soled shoes that day, instead of the running shoes she usually wore when riding.

I suggest you bring her and the bike to your local bike shop and get some fitting advice. Ideally that would have happened before purchasing the bike.

Changing wheel size is not really an option. As posted in Mikkel's answer, the frame is designed for a particular wheel size and you don't want to mess with that.