Regarding the dreams, I would like to offer an alternative perspective for you to consider and for everyone to assess for truth or falsehood.
Nightmares can result from fear.
Dreams typically carry notes and aspects of our waking lives. This is especially true whenever there is something that the waking mind considers to be important and/or urgent. Different parts of our lives get tossed into a stew, stirred around to become something unrecognizable, then served up for our minds at night. If our lives are currently filled with particularly distinct "flavours", then there's a good chance we'll notice them and define the entire "dish" (dream) by that "flavour" (part of life). These things could be the stress from an approaching work deadline, the enjoyment of a new relationship, or the urge to use the washroom.
We see this in children who recently watched a movie they consider to be scary. Soon after, they get a nightmare. It is easy for us to recognize the cause of this effect. It's not always easy to see the connections between dreams and our lives, but sometimes it is.
I would propose that your wife's nightmares are the direct result from fears she has in her waking life. These fears are looming large in her waking mind, and are thus becoming noticeable in her mind while asleep. The correct main target of your concern, then, may not be the nightmares themselves, but the fears that cause them. When fighting a disease, targeting the symptoms can be good and helpful, but addressing the underlying cause has much greater importance.
Turning the nightmares into a battleground is appealing because it turns a situation in which we have no power into one where we feel we do have power. After all, what can we do about our own dreams, let alone those of another person? Instead of feeling powerless, when we don't know what else to do we turn to prayer. That's good. But by choosing what we think is the cause, and declaring war on it, we may very well miss the actual cause.
Not only might we miss the actual cause when declaring war, but we put ourselves into a bind in the process. If the nightmares keep coming, why? "Why didn't God protect me?" "What am I doing wrong?" "There must be sin in my life, and I must find it.". Instead of finding power, we might find we're powerless when the specific answer we're looking for doesn't come, and we don't know why. Rather, it is not because God is not protecting us, nor because we are failing in some way, but because our minds are doing what they're made to do, and the underlying causes are not being fixed.
When we dwell on something, that thing becomes important to us. If we think about God and the things about Him, our understanding and perhaps our relationship with Him will grow. If we study a topic, we become more knowledgeable about it. If we stay in our anger, we may become one of those stereotypical cranky elderly people. If we continue to think about our fears, then they become stronger.
I think this is why the Bible says we should think/dwell on things that are true, and good, and lovely, etc. Not only because they are good and whatnot, but by thinking/dwelling on them they then become stronger within us. It is very much like any physical skill; the more we do it, the better we become at doing it.
In my case, I am one of those that occasionally recognizes my shortcomings and then turns that recognition into self-loathing and despair. When I turned that into a battleground and thought that it must be because I am falling shorter than what is acceptable to God, and that I should not be feeling those ways and thus there must be some cause I must eradicate, I ended up making things worse in myself. The darkness would just get deeper. Because it didn't leave, I thought it was because of something I was doing wrong. I never allowed myself to doubt that whatever God does is good, but I did occasionally wonder if God was disappointed in me and my failures, perhaps to the point of leaving me in them.
Now I've come to recognize that my struggles will return, again and again, simply because that is my lot in life. But I have noticed that if I dwell on them in those moments then it gets worse. If I continue traveling those paths in my mind, the darkness embraces me. If instead I recognize the direction my mind is going, and turn to God and let Him know and try to trust Him, and set my pain aside, then I am far better off. The darkness may recede sooner, or at least not be as deep. It is difficult, because the hatred is for some reason tantalizing, and because it bears a resemblance to righteousness and so is hard to recognize as not truly being righteous.
Like Psalm 46:10 says: "Be still [cease striving, quit struggling, stop fighting and trying so hard], and know that I am God."
I say these things because I wonder if your wife's fears (or anyone's fears, really) are similar in behaviour. If, in the moment, those fears are dwelled on, and the paths of those concerns are followed, then those fears will become stronger. If instead those fears are recognized, and she turns to you and to God and tries to trust you and Him, and tries to set her concerns aside (in other words, not dwell on them), then those fears may be alleviated. Of course, that's not easy. When is trust easy?
In the same way that a parent tries to comfort a child afraid of the dark, but cannot make the child fully trust the parent (since the child must learn to trust on their own), and in the same way that God comforts us but we are responsible for trusting Him in our need, so too you can comfort your wife but she must come to trust you on her own.
You are powerless to make her trust you, just like a parent is powerless to make a child trust them.
That's why a battleground is so tempting. But fighting can simply be fear of a different colour.
I neither am nor have ever been married, nor do I have children of my own, so this I say not out of experience but out of trying to understand how people work and how God works:
To follow how our Father treats us, you could listen to her fears and tell her why she does not need to be afraid. Show her that you are trustworthy, as He has shown us. Then let her come to trust you.
We trust God not only because He has told us we can and should, but also because He has demonstrated that he is worthy of trust. We have read it in His Word, but also likely seen His trustworthiness in our own lives. Our trust in Him is deepened over time and by each experience, and yet it still remains weak when compared to the challenges we come across that are bigger than we've faced before, but which serve to again deepen our trust. Yet through it all He remains patient. Even when our trust falters, He is still trustworthy. It is merely up to us to recognize that.
Unfortunately, I do not know how to convert this into practical suggestions for within a marriage.
I hope this perspective is helpful, or at least not the opposite of helpful.
