214(b) is for immigrant intent, basically she didn't overcome that. The previous ESTA overstay is a bad look for her case unfortunately. Since she is married to a USC, she can easily adjust status and stay in the US.
Very common. They are not required to consider or look at documents you bring to make their decision.
Hm, it's an odd question as you'd think the embassy staff know that but who knows. What did she give as an answer? Maybe something she said sounded suspicious immigrant intent-wise, combined with the other stuff stacked against her (USC spouse, overstay etc.)
That's not good that she said "No one" especially given the context of having family in the US. It sounds like she was nervous but the CO probably just marked that down as another suspicious response.
Just in the future, if they ask a question like that, it's not about "reason for travel" but just being upfront about ties to the US. Her having family in the US is a tie, and saying "no one" could appear like she was trying to downplay it, which could be seen as suspicious. Unfortunately this situation overall doesn't look good. She can wait a year and apply again and see. Not much else she can do.