Make sure you enclose a copy of your permission to stay in Thailand - i.e. work permit/extension, retirement/marriage extension - and details of your kids' schooling in Thailand. I doubt you will have any problem getting the visa.
All UK visas are for 6 months (multiple entry). However, on the application she will need to say how long she plans to stay in the UK. If she says "6 months" she will need to explain how she can be away from Thailand for so long. Very few Thais can get a 6 month holiday from work.
VFS is the drop-off centre for UK visa applications. They will check the documentation and forward it to the UK Embassy. You will also need to collect your wife's passport from there. Biometrics include a photo, and other information (retina) which is to verify your wife's identity and store it.
Yes (anyone can), although it would make sense for a British husband to sponsor his own wife, especially if they have a life together in Thailand, which will help with the 'reason to return'. His daughter only needs to write a letter/email confirming they can stay with her and proving she owns the house where they will stay.