Venice is enchanting, and I hope you'll be able to go. I would suggest getting a hotel very near the attractions that most interest her. That will let her explore without the vaporetto, if she decides she doesn't want to get on a boat.
You don't mention when you're planning to go, but FYI, I've experienced some rough water in the latter part of October and early November. I grew up on boats in the San Francisco Bay and along the coast, yet I can think of a couple of days in Venice when I was holding on to something to keep my balance. However, if you are going in the fall or winter, it's easy enough to look at the water and the sky so you can decide whether it's a good day to get on a boat.
You might also consider getting a hotel with an elevator if she's likely to be tired from the stairs and bridges involved in walking in Venice.
Be sure to get VERY detailed directions to your hotel – you can't readily find buildings in Venice just by having an address. That's probably the genesis of the horror stories she heard.
Regarding tours, there are lots of good walking tours that avoid using any boat. The RS guidebooks have some, and RS also has audio tours that you can download onto your smart phone.
My preferred tour company is Context Venice, which limits groups to 6 and has amazingly well educated guides. Because groups are so small, the guides almost always ask about interests and concerns – that might be good with your wife's worries. I've also found their customer service to be very good, so you may want to call their US office to ask about what tours might be good for your wife.