Reel and Line for U'r Boo
First off, congratulations. Sounds as if you have a truly loving wife.
If $300+ is out of your price range, then forget the Hardy's, Peerless, and Ballin's as reel choices, and take a look at the Orvis CFO II. The CFO has the classic look of a Hardy Golden Princess for a lot less $$$.
As Bamboozle said, the issue of DT vs WF has been beaten to death, and really comes down to a matter of personal preference. I would try and find both lines and try casting each before making a final decision.
I've been fishing the Cortland Sylk lines for two years and have not experienced any of the problems Bamboozle mentioned, although I know of other people who have reported similar problems. I have them in 3, 4, and 5 Wt's and like their suppleness and color. A lot of bamboo folks also go with the Cortland 444 Peach, and I've got a couple of those that I also like. The problem with the Peach is the color, but that can be rectified with a quick Ritz dye job; see http://www.iffa.org.uk/dyinglines.htm.
Dan S
"I still don't know why I fish or why other men fish, except that we like it and it makes us think and feel." Roderick Haig-Brown, A River Never Sleeps