you're describing the very center, not the entire city. And op is asking about renting a house which means outside the center - good luck riding a bicycle from San Sai or Hang Dong
Not sure whether you will be asked, but if youve been in Columbia in the last six months, you legally need proof of Yellow Fever vacination to enter Thailand along with what Tod said.
You can be self-employed and get the DTV, the problem in your case is that you need to show evidence of that and while it may vary between embassies/consulates, things like tax returns, previous evidence of payments and contracts can/are asked for as evidence.
If she's volunteering, she should already have an appropriate visa and a Work Permit, because, without it, she's working illegally - volunteer work is considered work in the Kingdom. Chiang Mai Immigration regularly inspects places for foreigners breaking the law and if they find her, she will be arrested, eventually deported and banned from Thailand.
First option would be to try to find another toilet -from restaurants to older Thai houses, they often have both. The second option and you need to sh*t, drop your dacks and squat over the front if you can't balance and do it properly. As long as you get it in there, you can then wash it away.
every entry you get 180 days as part of the visa - all inclusive. The only time you need to pay/apply for anything is of you want an extension on each 180 day entry.