I'm not totally up on this (since I'm English and my wife is French, so Europe is easy for us) but a friend of mine (also English) married an American and I remember it took quite a bit of effort for her to become a dual British citizen and gain full residency. Basically, I'm not 100% sure the fact your wife could gain Italian citizenship will automatically give you full residency/rights too.

I might be talking crap but worth checking out. In any case, it's definitely do-able and you should give it a go! Europe's awesome (and v. kid friendly)