Well, I've learned a lot from dinking around with this stuff. I ended up leaving the original PST file Inbox as is. Created a new IMAP connection to the account outside of the PST file and created a rule to move a copy over to her inbox. Unsubscribed from all but the inbox on her machine and I'll take care of cleaning up the account on my IPhone. I learned there are a bunch of ways to get email, I ended up with the solution that lets me get email on my IPhone and get the least amount of issues with the house commander.
Thanks for help!