Ballroom dancing is not sexual, it is intimate, and there is a huge difference. Most women seem to get it but men have a harder time. To answer your question, "where is this going?" It is going to make your wife a better dancer, that's all. Close or open contact position doesn't matter. All the good dancers dance in close hold. I find it ver difficult to dance any other way. My husband dances and he always dances in close position with every women he dances with. It is the way it is done. Club dancing is very sexual and often inappropriate. If a man or women dances ballroom in a sexual manner they are shunned.
So your wife's instructor is young and good-looking, most of them are so get use to it. I have a competitive partner, that is younger than me. Every body part we have has touched at some point and neither of us think anything of it. In dancing, they are just parts.
Dance with your wife, become the best dancer you can be and you will reap the rewards. Also, my husband has women lining up to dance with him. Sometimes I have to beat them off with a stick. He finds it very flattering but it ends at the end of the song and he goes home with me.

The proper smooth dancing hold IS a closed position - hip to hip. It's how the lady feels where the guy is leading her. HOW can she feel where to move to in an open position with her head up and to the left and NO reference points??? I know many of you guys THINK women can mind read, but not here! This is a DANCE not making love on the open floor, it means NOTHING. Unless your wife has given you other cause, your jealous makes as much sense as getting upset at her going to a doctor for an exam. The doctor sees a LOT more than any dance instructor would.

I've seen plenty of male dance instructors teaching male students smooth dancing IN closed position when say the female instructor is out sick or the guy WANTS a guys opinion of how to do the step(s) correctly. IT MEANS NOTHING. What it does come down to is how secure each man is in himself. I saw an Argentine tango showcase last year with 2 guys and 1 girl. At several points both guys danced with each other. It was a fantastic performance! Historically Argentine tango WAS danced with 2 guys, ladies were forbidden to participate.

The couples I dance with socially and compete against all take couples lessons as well as individual lessons (with instructors of the opposite sex.) They are secure in their spouses to dance with each other, to dance with their younger good looking instructors as well as dancing with others in the social setting. In fact it's more of the odd ball situation when couples are exclusive partners. AGAIN it's a dance, it's for fun, it's for excesses, it's for socialization.

Dancing IS a stress relief! I can not tell you how many times over the years I've heard people say "thank goodness it's Friday night so I can go dancing and check the weeks stress at the studio door." I would suggest you take lesson and learn how much fun IT IS to be on the dance floor. Your away a lot, most hotels have gyms with mirrors for you to practice. I've even known a few guys who Googel dance studios near their hotels so they can get some floor/mirror time to work on moves. Some are lucky enough to find group lessons too. Guys are in sort supply in the social setting. You will get more of workout than she will. Also both of you will have the opportunity to make new friends of ALL ages and ALL walks of life.