On the downside, we had a remarkably weak showing challenging up a level. Not only did we fail to make it past the opening quarterfinal round, but in both Standard and Latin we placed last...and even earned zero recalls for Standard! This despite 20-30% of the field overlapping with the level below.
If the level separation is working properly, that 20-30% overlap is at the bottom of the field in the upper level, since they are the part who are, in that level, competing "up". Was the cut more than 30%? Then anyone from that 30% should be surprised if they make the first cut.
Zero recalls just means you were consistently in the 30%, rather than inconsistently showing moments of brilliancy and and of disaster. Remember, the objective to dancing "up" is floor experience, not results, even if you are used to focusing on results.
But in Smooth, it is harder to trace reasons for the lesser result. It was the first event in the evening, so we were fresh. Wife and I both felt we executed just about as well as in the lower event. And yet we were soundly defeated by some of the same couples over which we won convincingly at the lower level. What was so different?
Presumably you would prefer for your better placements to be in the event where you made the final? I'd say that mean you were doing it right.
With respect to the results in the higher level, the first thing that jumps to mind given those circumstances is that you might not have been as warmed up for the first event as some of the other couples. Some of them probably stayed to practice during any dinner break; I assume you had dinner? And if I'm reading this correctly, your wife perhaps had no events during the daytime session in which to warm up? My experience is that better warm up contributes to better placement - presumably due to better dancing - even when the "feel" is the same.
Note that that's a hypothesis, not advice. For example, I wouldn't advise skipping dinner for practice, especially since it sounds like you may already have done significant dancing.
I wouldn't take this as a reason not to do it again. I assume the lower level was later? So the warmup from one round of the higher level may have contributed to a stronger placement at the lower level.
I also suspect one other possible cause in this case. To get marked by a judge, the judge first has to see you, then has to decide you are good enough to mark, all in the course of a few seconds. In a final, the judges typically try hard to look at all the couples, and the deciding factor is how good look are once they see you. In preliminary rounds, especially if they are crowded as is often the case at collegiate events, the limiting factor can be whether the judges see you in the first place.
If your wife is still wearing the black ballgown, I would expect that to hurt you more in a preliminary round than in a final. In addition, if I recall correctly, your choreography includes a significant amount of closed position work - maybe to meet USA Dance rules, which might not apply in collegiate competitions? - which can contribute to quality, but doesn't tend to draw the eye as much. In the lower level, your dancing was good enough to get marked through anyway, and in the final, you were seen anyway. In the higher level, you might have needed more flash - including ballgown color - to get marked.
In the long run, continuing to improve the dancing is of course the solution. Whether your wife wants to invest in a more brightly colored dress in the meantime is up to her - or she could do that and also do the "change dresses for the final" thing if she wants.