I found that it is the placement is the issue for me. When I tried different flutes, it came down to how comfortable it was. And that was determined by the hole placement. Just my experiece.
Pat,
If you have an excellent flute (like Joanie’s) and really know what you are doing, you can get an Irish sound from
a silver flute,
no question. If you are a noobie, it is a difficult way to start ITM, especially when much less expensive,
more easily fingered wooden trad sounding alternatives are readily available. Again, there
is no real practical problem in the first place.
Since you haven’t been allowed to escape yet Steve…
I thought somewhere on the site there was a flute hole spacing/size comparison thread (? started by “Julia”). I can’t find it, but there are some comparisons here : http://sites.google.com/site/dougsflutes/flutefingerholecomparison and info on the small-handed Burns partway down here: https://forums.chiffandfipple.com/t/small-hand-flutes-was-wtb-burns-pratten-or-t-mcgee-glp/49445/1 It looks like the Dixon is betwen the standard and small-handed Burns in spacing. While you still have the for-sale flute you could do some measurements to compare.
That kind of thing isn’t particularly rare, Kenny. (I hope the OP will excuse this digression!) In fact “hybrid” flutes using Bohm style rod-axle mechanisms to mount “improved” and often augmented but still essentially simple system keys, including providing platter-keys for all the “normally” open tone-holes were very common in Britain in the later C19th and a good many survive. I’ve seen quite a few one way and another. Some were from high-end makers, but many were cheap, including German imports. A good many of the later versions of Siccama’s and Pratten’s “systems” would fall into this category. Of course, whether on conoid or cylinder bodies, the majority were, being from that era, built for High Pitch.
See also Rick Wilson’s relevant pages: http://www.oldflutes.com/hybrid.htm & http://www.oldflutes.com/articles/oldsys.htm
There’s a Potter Bb treble band flute of that general type on eBay currently, and Phil('s Historical instrument) has another similar piccolo as well as a RC&Co concert flute of the same breed (and ridiculously overpriced for what it is and its condition!). They don’t tend to be worth very much - at any rate, not the HP concert flutes.
Check out James_Alto’s descovery on this other thread: https://forums.chiffandfipple.com/t/key-style/77660/3
How’s Augusta this year Pat?
Feadoggie
What else was in that dustbin! 
Veering back to Steve’s original topic …
Steve, while not discounting the possibility that your wife’s hands are extraordinarily small, my impression is that the crux of the matter is not so much the size of the holes or spacing or keys or a different flute, but a lack of patience (and perhaps motivation) with the sometimes difficult work involved for a beginner to adapt to the physical demands of the instrument. No one said it was supposed to be easy. It takes time to learn to feel the holes under the fingers, to gradually stretch the hands and improve flexibility, to get comfortable with piper’s grip. This can be a matter of months or a year, not the mere 3 weeks between the time you bought the Sweet cherrywood flute and then put it up for sale. Your wife’s resistance to learning high whistle as a step toward the flute is also telling. It has all the classic signs of expecting instant gratification, and just giving up.
Of course, there’s no shame in simply not wanting to learn badly enough to do the work. Incredibly, I actually know some wonderful people who have no desire to play the flute! 
But I think it pays to be honest with oneself, especially if she may want to try other instruments to discover the one that’s right for her, only to find that each one comes with its own set of challenges requiring patience and motivation. The right attitude is always the first, most important skill.
My (admittedly limited) experience with the problem is that hand size is usually not the main issue. The largest hole is only around 12 mm, and can usually be covered with piper’s grip by even small hands, unless your fingers are downright skeletal. With the correct pressure and angle, and sometimes hand-care products for suppleness, the fingers will flatten out over time.
Hole spacing can be more of a hard limit. But piper’s grip is extraordinarily effective in extending one’s reach - to the point that even youngsters are able to play standard sized instruments, and even adults can handle large bansuris, oversized bass whistles, etc. And again, piper’s grip may take weeks or months to master. An F whistle (since you mentioned it) should be manageable by any normal adult hand, so that’s a good test, and failure there is almost certainly the fault of the player’s lack of trying.
It also definitely takes time for the brain to adjust to the feel of open holes under the fingers, and for some brains more time than others; everyone can be different. So willingness and motivation to learn a smaller whistle can be a stepping-stone, with it’s own joys. There’s nothing wrong with covered-hole flutes on their own terms. But they’re not a substitute for open-hole instruments for exploiting the full range of traditional playing.
Finally, and probably needless to say, some hands-on assistance from an experienced simple-system flute player, teacher, or mentor can go a long way, and give your wife the tools she needs to overcome the initial difficulties, whether mental or physical.
All just my perspective, of course. In any case, good luck to both of you!
MT you may have hit the proverbial nail on the head. My wife has had a recent penchant for Irish music brought on by her coming across a particular Celtic group. All things Irish so to speak. She knew that I have messed with whistles for awhile so she thought she’d try the flute. She used to play a baroque recorder. She tried the flute and deemed it too hard. I believe she’s not really wanting to embark on a journey that requires as much work as the transverse flute right now. So I’m gonna let a sleeping dog lay for now. I may one day if the funds present themselves get one to mess with myself (that she would be more than welcome to mess with) because they’re fascinating to me. That’s about the extent of it right now. I had hoped she would be more interested but she’s just not quite there right now. Maybe in the future. I do appreciate everyone’s comments and advice.
If that is the case, then she should know that other than being a way to deal with hand span issues, going keyed is not going to make fluteplaying any easier than not having them. Handling-wise it IS a different instrument, but that’s pretty much where it ends, for broadly speaking the issues of developing a good working embouchure and good tone and pitch control still apply no matter what, and that, really, is the main thing more than anything else about flutes in general. I recall talking about flutes to someone, a box player, and he seemed rather astonished to learn that these things don’t just play themselves.
Awesome!
Have fun! Wish I could have made it this year.
Feadoggie
I’d encourage your wife to check out other instruments as the opportunity arises. There may be one that she takes to enough that she will be motivated to master its challenges.