You just recieved a stamp at Immigration but they told you shut up or we will shoot you. Questions about stamp and travel are asked on Facebook, not at Immigration office.
Application fee is 1.900 thb no matter on time given or even denied. So you did not pay for 1 year.
You are not allowed to be inside a foreign country with an invalid passport, which is the reason that the last day of permission to stay inside Thailand is the same as the last day validity passport.
And you think when you make a new passport, the Thai Immigration Bureau will delete all your information on their database to please your way of living in Thailand?
I guess you have a big stamp in your passport with in line 2 the text "Extension of Stay permitted up to
*****
/2024.
Buy a Single Re-Entry Permit at your local Immigration office, cost 1.000 Thb, leave to Europe, apply for the new passport, come back using BOTH passports, get a new entry stamp Admitted until
*****
/2024 in your new passport.
And apply for a new Extension of Stay by handing over both passports, your idea is good, simple and can be done without any problems.
Benefit on the ON-LINE application is that computers do not talk.
You type and choose the options needed, so make two account, one for you, one for the missus, and apply for one Non Immigrant O visa based on being over 50 years of age (retirement and for one Non Immigrant O visa based on visiting family or staying with applicants family resided in Thailand.
All neighbor countries of Thailand has the rule of minimum 6 months validity of passport to enter the country, so back to Thailand is no problem but you can not leave by land.
Only option is fly back home, get a new passport and come back into Thailand.