Hi corcort! Well, I had the same doubt about the Olympus strobe fot PT-20, and many people I asked for opinions advised me against taht flash. I don't know by my own experience if this is a good or a bad stobe, but the opinions against it were unanimous. Everybody told me: dont' purchase that strobe. Here in Spain that Olympus strobe hasn't a good reputation among UW photographers.
In the other hand, I have a friend that ussually comes for diving & taking photos with us, he has the Olympus flash and the results are not wholly bad, he gets good colour and lightning in short distances, macro, small and medium-size fishes. But is not good for wide angle or from larger distances. My friend notices an important lack of light when he tries to shoot medium distance or far objects.
So, do what you think is good for your wife's camera, maybe she doesn't mind this limitations, but sure she will take more advantege from a camera like Olympus 5060 with a better or more versatile strobe.
I have the same camera and housing, and I've just purchased an Ikelite DS 125. But if you think it's too bulky, maybe DS-50 could be smaller? The EV manual controller is good for the Olympus housing (I mean, if you don't have the Iklite housing with TTL), I use that manual controller and is perfect for me. I think thas INON has less bulky strobes.
I hope all this could be of help for you. Regards! 