He would need a Thai bank account in order to apply in Thailand. If he already has that then it shouldn't be an issue. If he doesn't have that yet then he likely will not be able to open it if he enters as a tourist.
Also, she can enter on her expired passport, which is a better option than entering as a foreigner and then being seen by the law as a foreigner subject to immigration laws.
That may have been true 5 or 10 years ago, but it's certainly not now. You'll be stopped and eventually denied entry after 2-3 times trying this. If you want to stay long term in Thailand, you need a long term visa.
it's impossible to get a non-O visa without proof of funds in a Thai bank account. Go to Laos and apply for a non-O there. You should have done it before you originally traveled to Thailand. That's how visas work.
You can get a license from any DLT office. Just make sure you have all the paperwork (Certificate of residence, health check, any other items the DLT you will go to requires).
The Thais aren't helping themselves. If they can't rent their condo they raise the price to make up for not renting it in a while. And then they would rather leave the price high than admit they were wrong and lower it. So they all just sit empty. A lot of newer/fancier condo developments are ghost towns.