I will address all your concerns.
1. Is my understanding listed above correct?
You are correct that your FRA is 66.
If you start your social security benefits before reaching 66 - your benefits will be permanently reduced depending on the number of months you start earlier.
If you continue to work and your earning will be high enough - your benefits will be recalculated - but only from the following January.
The SSA will recalculate your benefits every year based on additional earning.
Your spouse will be eligible for spousal benefits (based on your working record) as soon as you start your benefits.
Spousal benefits are 50% of yours - but may be further reduced depending when your spouse started her benefits.
Now regarding your earning - you may receive benefits and work at the same time - but when your earning is above certain limit in teh year you reach your FRA - your benefits are reduced up to the month preceded your FRA.
It might be not correct to call that reduction a penalty...
If you know your earning - you might want to tell the SSA and they will recalculate your benefits accordingly.
If not - at the end of the year the SSA will send you a letter regarding overpaid amount and will ask to pay back.
2. Will the $44,880 threshold go up in 2018? When is that figure released?
The limit on your earnings for the months before full retirement age is $44,880 for 2017. For 2018 that limit might be slightly higher - but not yet published.
3. Will any of my wife's spousal share be used to pay the penalty?
That will affect your wife's spousal benefits as well.. so she might be asked to pay back some social security benefits.
4. Will the spousal share be based on my age 65 amount, my age 65 6 months amount or my age 66 amount.
The spousal benefits will be 50% of benefits paid to you - and may be further reduced.
5. What percentage of my monthly benefit be her spousal benefit? (50% of whatever I receive?)
That will be 50% of your benefits if she started her benefits at HER FRA.
IF she started before her FRA - her spousal benefits will be reduced based on the number of months she stated earlier.
6. Would her increase start in January or when I actually start receiving a SS check in the mail?
Any recalculation based on additional earning or because of delay or COLA will be done annually and will affect your January benefits.