I didn't have any issues with rubbing except at full lock and full compression (going over some hard bumps off-roading). The 265/70 tires "lifted" my rig up about 1/2 inch. But if this will be your wife's daily driver, I would just stick to the 265/65's, since she will have an easier time getting in and out (esp. with the young one). Plus, the bigger tires drop your MPG (mine dropped by 2MPG).
If you're not going off-road in this, an all-season tire would suit you the best. Something like Michelin A/S or Bridgestone's would be good. They offer a better ride than the All-Terrains. IF you are going to go off the beaten path, I'd recommend Bridgestone REVO's myself. Very good on-road manners and does well in snow, rain and light mud.