Using 1 Apple ID on 2 iPhones (but using one like a Touch for kids)

I just purchased an iPhone 5 to replace my 3GS. However I'd like to give my 3GS to my young daughter to play games/videos and use the apps I've already purchased for her on there. However she will not have a phone service activated on it... will I have to sync it manually with the USB cable to update the apps? Will she be able to use Wi-Fi on that device if it is not activated with a cell phone carrier?
Also, I bought those apps under my Apple ID. How do I go about doing this? Can my 1 Apple ID work on two phones at the same time? I don't want to have to purchase those apps again. And if I buy a new app in iTunes in the future, will it immediately download to both devices or can I specify which device gets which apps?
What other limitations will she have using the old iPhone as if it were a Touch (without phone access)? Will we have any complications by using the same Apple ID on both devices?
I know this is a LOT of questions, so I appreciate your help! I have this new iPhone 5 sitting here waiting to be activated, but wanted to make sure I have everything straight and planned out first!
Thanks!!!

Well you wrote that YOU could activate your number, so I assume that you can send/receive using your number, and that your girlfriend also has the option to use YOUR number on her phone as well?
For me, neither of my numbers are activating, so I can only use my Apple ID.
I do think this is a problem with Apple and iOS 6, as I was able to use both phones before upgrading. I was even able to activate each number under iOS 6, but they each deactivated on their own...

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