New Laptop - Laptop Account vs. Microsoft Account

Yes, in the last year MS has changed the way 365 works.

.

Before, one person, like you, could install and activate 365 on a computer and anyone else could use it. But now, M$ has (dis)"improved" it so that each person has to sign in to Office to get full functions.

.

Short answer:

yes, you have to "share" your 365 with your wife

Yes, it is better if your wife has a separate Windows account on the computer. It helps keep files separate.

.

Here is the tricky / confusing part. MS likes reusing names and terminology just to confuse users.

Windows has 2 (more) types of "accounts". The "traditional" "Local" account and the new "Microsoft" account

Local Account

Can be any name and password. You can reuse them on OTHER computers, but they will be treated totally separately

Microsoft Account

Is the email account and password that you have an Office 365 subscription on, either as owner of the subscription or as a 365 Family share granted to you.

.

When you use your email account and password to sign in, Windows automagically signs you in to Office 365 at the same time. It is "user friendly" to save you time. This grants you access to your email and onedrive. If you use the same "microsoft account" on another computer (you are allowed to use it on up to 5 computers at the same time) you will have access to the same email and onedrive.

https://support.microsoft.com/en-us/windows/create-a-user-account-in-windows-4fac6fd5-74c0-9737-69b8-6e77e00422dc