Question about sharing itunes library with another mac acct user

I have set up my itunes library to be accessible from an external HD and have it set up to where a second acct user on my mac can access it. My goal is to be able to sync my wife's and my iphone to the same itunes library/playlists, since we share that music. I followed the instructions to set this up and can see the original library showing up in the itunes acct of the second user. What I dont understand is haw to sync my playlists to the second accounts user's iphone? When I connect and pull up itunes, and select to sync specific playlists, it only gives me the option to select new playlists created on her accounts, not the ones I am sharing with the second account? All of the songs are showing up in her library as well as my visible shared library. Is this how it should work...in other words, it I add a new song to my library, it will also show up in the second accounts library, along with the one that is visible as my shared library. Does the second account just need to make their own playlists, vs being able to select specific ones on my account to sync?