Anytime an agent tells you that the "upgrade should clear soon" they are just making things up.
Upgrade space either exists or it doesn't. It sounds like they just put you both on the waitlist from the get go.
Months later it's really hard to tell exactly what happened, but we have seen instances where your reservation may appear to show business class even when you're just waitlisted. EDIT: And based on what you just mentioned in your subsequent posts this is almost assuredly what happened, the upgrade never cleared in the first place.
Also even though she is waitlisted with a CK's SWU (supposedly) her waitlist position is based on her status, which sounds like none.
The last thing I'd be worried about is why your PHX-DFW segment hasn't cleared yet, it is 100% normal for AA not to release any C space months in advance for a route like that. Calling over and over is just going to solicit bogus responses from clueless agents.
Unfortunately devoting years of loyalty just so you can get upgraded on one special trip where you have zero flexibility on dates etc. is always a recipe for disaster.