Change the V5 so that your wife AND one of her parents are registered keepers (doesn't add any extra keepers to the history), then get the parent to insure the car with your wife as named driver, or for all drivers over 25 yrs old, that sort of thing.

Driving licence - yes, they take your UK one and return it to the DVLA. The Swiss one's much nicer; a lovely neat little plastic card without all that silly paper nonsense.

kodokan