I'm not going sit on the fence here, get the 400. Unless she wants to ride someone two-up consistently, the 400 is the way to go. It's lighter, cheaper, lower seat height, easier to maneuver and mount, can handle a single passenger of 250 pounds +, cheaper insurance, etc., etc. Given her arthritis, it would be the easier machine to move comfortably.
The 400 was the only bike I had for seven years and it did everything I needed just fine. I got the 650 because it was a great deal and to save miles on the 400 (but i love the 650 now too).
Recommend '08 up. I have an '07 and there were a few issues Suzuki ironed out.
Then again, I saw your video, if she wants any chance of keeping up with you, perhaps a CBR is in order. Lol.
Good luck. Let us know what you get.