Questions:
1. If use AP come back, will my wife be I-485 pending
only?
no. Using AP won't cause her to loose H4.
2. Is it better to apply H4 visa for her while we are in China?
up to you
3. If H4 visa denied, could she still use AP to come back?
She should be able to, but since she already has AP, don't really see the need.
Could we go through the line for GC/Citizen?
I don't think so.