Home Sharing and Apple IDs

Question

I apologize in advance if this doesn't make sense or has been answered elsewhere - it is nearly 1am and I am so done with research.  I'd have given up by now except that this is important to deal with before I dig myself into an even bigger hole.
My daughter got an iPad mini.  She didn’t have her own Apple ID (since she is only 7), so I synced it up with her older brother’s iTunes library/Apple ID on our PC.  She had been playing games on his iPod and downloaded some of her own favorites using his account.  Now she's gotten progress built up on her iPad and even had big brother buy her some games under his Apple ID just for her use.
I have an Apple ID and iTunes library but only download music (no apps) since I don’t have any Apple devices.
Now, I recently got her her own Apple ID so she can use iMessage.  She has been getting iTunes gift cards for her birthday, so I was planning on letting her use her own account for downloads too.  This way the accounting between the 2 kids will make sense (they can’t use up each other’s gift card balances and I don't have to keep track of it).  Since there is a 13-year age limit I suppose the question is moot – I shouldn’t even be trying to do this.  But the question will come up in 6 years anyway … or sooner if I come to the dark side and give up my Blackberry
I would like to share the music and apps that we have purchased instead of having to spend money again to put them on both of their devices.  She is also worried that she will lose progress in the games she plays that she got from her brother. 
Q1: If I re-purchase the games under her account and then sync with her library (iTunes tells me it will wipe her iPad before syncing to this new library), will she lose progress even though the game will be removed and re-installed right away?  I suppose I could ensure I have a good backup of her iPad using his iTunes library and then try to sync it up with her library.  If it loses her progress, I could just restore using his library and try something different.
Q2: Would home sharing help? I read about it and am still confused. Is it just so I can use multiple machines to host my library (all with same Apple ID) or can I use it to share content with my family members’ libraries (even though we have different Apple IDs)?
This is so frustrating. I am a technically literate person (I work in IT), but don’t have unlimited free time to spend becoming an expert in all things Apple just so I can get these devices working the way I expect they should.  It shouldn’t be this difficult or time consuming.  I’ve wasted hours I don't have reading articles, going into the Apple store (which is not convenient), and still feel unable to make a decision because the wrong one could get me into an even more confusing/costly situation.  Sorry I am whining.  I'm so tired

Answer 1

Hi JustTired,
OK, so to answer your first question - if your daughter's iPod is sync'd with a new iTunes library, then even if you do purchase games to reside in that library, the games she was playing that were purchased under a separate Apple ID will not "transfer" her progress. Essentially, you are loading a brand new game on her device.
For your second question - to the best of my knowledge, Home Sharing will not help you to share multiple iTunes libraries that live on the same physical computer under separate Apple IDs:
Home Sharing requires a computer using the latest version of iTunes,* and one or more of the following devices on the same home network:
Another computer using the latest version of iTunes.* You can use Home Sharing with up to five computers.
An iOS device with iOS 4.3 or later
Apple TV (2nd generation) with Apple TV software version 4.2.1 or later
Apple TV (3rd generation)
*Additionally, you should install any available updates for your version of Windows or Mac OS X.
Home Sharing requires all computers, iOS devices, and Apple TVs (2nd generation and 3rd generation) to use the same Apple ID.
Home Sharing is designed to share iTunes libraries on multiple computers (and devices), not mulitple libraries on the same computer.
You can, however, share your iTunes library with your daughter. To do this, you would sign on her Apple ID to "your" iTunes and Authorize the computer for her ID. Then you would sync her device as new with your iTunes library. This would require you to be logged on to the computer, but it would be her device (and Apple ID) that were syncing with the library. Based on how you then set up her device profile, she can sync anything in the library to her device.
The only thing you would need to keep in mind is that anything purchased in iTunes under your ID would be linked to your ID. That means that your daughter would not be able to re-download, say an App that accidently got deleted, wirelessly. She could re-sync it using a USB cable, but would not have access to your iTunes purchase history to be able to actually re-download it. Also, future app updates would require that she know your Apple ID password.
Now, if when setting up her Apple ID, you are also going to set it up with a Credit or Gift card so her purchases can be done with her ID, then that last caveat would not apply. In that scenaio, she would sign into "your" iTunes library (you logged onto the computer), and then do her purchases through the iTunes store. Your purchases and her purchases would live in the same library, and you would control what gets sync'd where via the individual device profiles.
Hope this helps and provides a viable answer for what you are wanting to do.
Cheers,
GB