Whoa, unsocialized dog and running kids so not a good situation! The reason the dog has warmed up to your wife is she is a quiet factor in this picture. This whole thing needs to be dialed way back. I’m not sure the circumstances this dog cones from is this unsocialization or temperament issue or both? A good start would be quiet time with everyone involved, don’t allow the children running screaming around the dog until the dogs gets time to acclimate to the new noise and activity levels and gets a chance to know everyone. Likely the dog is overwhelmed. When the kids are out playing keep the dog separate or when an adult is available leashed and let it observe what’s going on and become desensitized don’t allow chasing and barking and I would strongly advise dog training classes. This can work but it’s going to take some time and training before someone gets hurt.