Yeah, that sucks about the fashion industry, but that's the look they want, and if she wants to work, she has to fit in. It's ironic that the super skinny look and the means typically used to achieve it (skipping meals, excessive cardio) can contribute to increased fat storage over time, because these same methods contribute to muscle loss, resulting in a lower metabolism.
At 5'10 and 118 lbs no one could call your wife fat, but if she thinks there's excess jiggle in certain places, it's possible her body composition has changed to a less favorable ratio of muscle to fat. This can happen even if body weight remains constant (or drops).
If she wants to get extra fat off trouble spots, she needs to replace that fat with muscle. Added muscle will raise metabolism. Replacing fat with muscle will not make her "big". A pound of muscle takes up less space than a pound of fat, because muscle is denser.
As for diet, some people think the more complicated or painful the better. Different things work for different people, but I really like the Body for Life diet, similar to the Zone diet. 5-6 mini meals a day and basically each meal contains a balance of protein, carbs, and fats. The trick is eating the right kinds of proteins, carbs, and fats. Doing this keeps blood sugar steady, so you'll avoid energy lows and hunger. It allows for lots of variety. My husband likes it too. It doesn't even feel like a diet, but it works for us.