If my wife and I sign on to family sharing my iCloud account can she then also upload and save her pictures, files, etc to the same server that we can share? If yes then she would no longer need to pay or use storage on her own iCloud - right?

You can share an iCloud Storage plan. See the information in Share iCloud+ with your family - Apple Support

If she shares your plan, her current upgraded plan will automatically be cancelled when she switches.

Note that her data and photos will still be private to her own Apple ID. See the following from the above support article:

When you share an iCloud+ subscription, everyone in the family group uses their own account. That way your photos, documents, and other information stay private, even though you're sharing access to the service. You simply share the features and space available in iCloud+ with your family members, so you only have one plan to manage.

If you want to share all photos, that can be done whether or not you share a storage plan. See information in How to use iCloud Shared Photo Library - Apple Support

You can also share files/folders whether or not you share a storage plan. See: Use iCloud to share and collaborate on files and folders - Apple Support

Unfortunately, neither.

Just an old guy with free time.