Ah, well, if she doesn't need to leave and it suits your purposes, then an Inland application will work for you.
Yes, she gets OWP with her approval in principle (AIP), provided you apply for it at the same time you make the PR application BUT ensure you ask them not to process the work permit application until they assess her for AIP. If they process the WP first, it will almost surely be rejected.
Yes, she has implied status with the filing of the OWP application. You need a copy of the pages of her passport to go along with the application, since she is visa-exempt.
For her to remain in Canada legally during the process, you need to apply to extend her visitor status when it is close to running out (they recommend 30 days prior). As for how it can be done without the passport stamp, I am hoping an American can jump in here, as I am not visa-exempt, so I wouldn't know.