ICloud Photo Sharing

Since your goal is to free up space, you can configure your iPhone to only store thumbnails of the photos you have in iCloud Photo Library rather than the full-resolution images.

This is configured in Settings > iCloud > Photos > Optimize iPhone Storage (as opposed to Download and Keep Originals)

See this iMore article for more information on optimising storage.

It is not currently possible to completely remove photos or videos from one device when using iCloud Photo Library. This is clarified in the iCloud Photo Library beta FAQ:

Deleting a photo or video from your Photos app will also remove the item from iCloud Photo Library and from your iCloud storage allocation.

The solution would be to disable iCloud Photo Library, allowing you to delete certain photos from certain devices, but then new photos would not be synchronised automatically.

You need to have an iCloud id just for photos - Login on both devices using a (perhaps new) iCloud id which your photos will 'live' in. Turn off mail, contacts, calendars and reminders and notes on both devices for this shared iCloud id. So from now on, to apple's iCloud servers, it appears both iPhones are owned by the same "person".

After this, set up your mail id on your iPhone and your wife's mail on hers so you have access to your individual email accounts (you can also active contacts, calendars and reminders for this account so they appear on your respective iPhones).

Note: You will be sharing the same iCloud photo library, but also the same iCloud Safari passwords and wallet - but if you are sharing with one another all photos taken from your iPhones then this is (perhaps) a moot point...