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Your wife's car would be covered by its own collision. You'll have any deductible you owe on the rental, PLUS your wife's collision deductible. (Same as if you backed in to one of your cars with the other - two deductibles, two claims since you can't sue yourself.)
You've got it.
This type of 'oops' happens more often then you might imagine.
Depending on your deductible and the damage to your wifes car, you might just have it repaired. This way, nothing goes on your insurance that effects your premiums. This is one of the nice benefits to the rental company insurance.
Dan