Hi, and welcome. I drive a non-turbo 2.4 S60, and love it. I had neither the money nor the want/need for the turbo model. The power to weight ratio on the S60 was a world again better than what I HAD been driving (past 3 vehicles), so in comparison, it felt light, nimble, and sporty.
I equipped mine with the options I needed (ok, wanted) -- premium (leather, sunroof, automatic, power driver seat, etc.), cold weather (a non-issue for you, I suppose), and the 16" MIMAS alloy rims. Mine's silver with graphite interior...love it. No, the interior doesn't get too hot, although I do sometimes use the sunroof "vent" feature, and sometimes I put up my metallic sun visor when I think of it.
The only time I wish for more power is getting onto the freeway (we have uphill freeway entrances here like you do there...used to live in Pasadena, myself), and traffic is usually going a steady 80 mph or so. BUT, there's a kickdown that will engage if you punch down (hard!), and though I've only had to use that feature 3 times in the 3.5 months I've owned it, but it was nice to know it was there when I needed it!
I agree with all the comments above, particularly the rear visibility one (you do get used to it) and the one about taking a decent test drive.
Fit/Size/Comfort: Your wife is 5'3"...I'm just an inch taller, and it (car/seat/etc) fits me well. The seat belt, being non-adjustable, may run a tad high on her neck. However, the seat has plenty of adjustability, as does the infinitely adjustable tilt/telescoping steering column, so I'm sure that both of you will be able to find a comfortable setting.
One nice option you might enjoy is the power/memory driver's seat (part of the premium package, and also sold alone, I think). She can keep her settings at 1, and you can keep yours at 2. It's a nice feature when the two primary drivers are so vastly different size-wise!
P.S. You can price out your S60 on the web at the Volvo website. That's all. Happy hunting for your Volvo...