How do I separate the content of two iTunes accounts on one PC running Windows 7?

Question

Hello.  I have a dilemma that has been going on for years and am hopeful that someone can outdo the staff at the Apple Store Genius Bar who, after trying multiple times, could not solve this problem. This is a doozie, so get comfortable...
My wife and I have two separate iTunes accounts.  For clarity, this is two separate iTunes store accounts, where we each can log in with a separate e-mail address and password. Years ago, she had her own laptop from which she accessed iTunes and synced her iPhone without any issues.  I used another laptop to sync my iPhone, and all was well until the hard drive on my wife's laptop crashed.
After that, my wife logged into iTunes on my laptop and connected her iPhone to my laptop to sync up, but we found that all of the apps and data on her iPhone synced to my iTunes account.  When I connected my iPhone to the laptop to sync up, all of the content of her iPhone synced to my iPhone. Also, when she connected to the laptop and synced her iPhone, all of my content synced to her phone. So, she stopped connecting her iPhone to the laptop because we were not able to find a way to separate my content from her content when we sync our phones.
To make it more complicated, any app that we both run on our iPhone (e.g. Facebook, Yelp, etc.) is somehow "registered" under my account on her iPhone.  So, if any apps that we both use have an updated version, she is prompted to first enter her iTunes password to authorize the download for apps that only she runs, and then for my password to authorize apps that we both run. In other words, her iPhone is somehow permanently linked to my iTunes account.
Now, to make this even more interesting, let me add another level of despair.  When iOS 5 was released in 2011, we tried to update her iPhone by installing the new OS but the OS crashed during the install.  All of the apps that she had installed on her phone, including new contacts, were lost because she had not synced to the laptop for some time. When the iPhone was restored and iOS5 was installed at the Apple Store, we learned that all contacts and pictures stored there were lost.  Fortunately the apps that she purchased were saved because they were still stored on her iTunes account, but still are only accessible through my iTunes account on the laptop since all of the content is merged, as mentioned above. Also, when we restored them, she got all apps (mine and hers) so she had to manually delete mine which took a lot of time.  So, consequently she is still running iOS 5 because we don't want to deal with the hassle of losing any data or having to manually delete my apps from her iPhone.
So, I am extremely hopeful that someone can demonstrate some intellectual "heavy lifting" and can help us to answer the following questions:
1) How can we set up iTunes so that our content is separated rather than stored completely on my iTunes account?
2) How can we modify the settings in iTunes and/or iPhone so that we will only access our own content upon connecting to the laptop? (Note: I realize that iCloud makes it unnecessary to sync via USB but occasionally use the computer to charge my iPhone and it syncs automatically)
3) How can we modify the settings on her iPhone so that it does not recognize mutual apps as "my" apps and prompt her to enter my iTunes password to update them when a new release is available?
4) If she were to install the current version of iOS, how can we ensure that her data will not be lost if the software crashes again?
Whoever can figure this out gets to brag about being the coolest person in the world, at least in my book. Thanks in advance.

Answer 1

Look here.
http://support.apple.com/kb/index?page=answerlink&url=http%3A%2F%2Fsupport.apple .com%2Fkb%2FHT1495&answerid=16777216&src=support_site.home.search