1. We thought renewing the visa was the first start so we could start the green card process when she got back. Heard that it gets more complicated without a visa and since she is getting a PhD, we were thinking that was the correct path to take. I don't know though since this is our first time dealing with this.
2. yes, my wife visa had been expired for a year but that isn't completely her fault. The university intonational department told her that she had a "use case" to be in the U.S. to complete her studies with the university and if the visa expired she was still here in the USA legally.
Marriage to a US citizen is a strong tie to the US. A Consulate Officer will certainly take that into consideration. However, it seems to me that there is still hope that she will get the F-1. Just have to wait.