OP, it is good to hear that your wife wants a proper car instead of an SUV, she gets my vote.

In the UK probably half of all new cars sold are diesel and most of those will be company cars where people get taxed on the C02 emmisions so diesels work out cheap of them. Fuel is expensive here, so economy is important.

VW are usually lower mid table on the reliablity charts, Toyota, Honda and Lexus normally make up the top 3 in varying order, however a lot of VAG cars will be high mileage company cars working hard for a living so problems will soon arise. Either way, modern diesels are not without their problems that you will have heard about in pickups. Diesel particulate filters, dual mass flywheels, variable geometry turbos and fuel systems all seem cause problems on all breeds, that said Honda France have offered a 1,000,000km warranty on their new 1.6litre diesel, if it goes wrong, they will fix it.

You would need to sit down and carefully work out whether or not a diesel will actually save you any money over the same gas engined car and take into account putting some money aside for some expensive surprises. My parents have a new 1,6 diesel Skoda Fabia, on the same platform as the VW Polo, which if you don't know is the car one down from the VW Golf. My sister inlaw has a new Ford Fiesta 1.0 Ecoboost. Both cars are about the same size, both compete in the same sector, both have the same hp the Ford is Gas, the Skoda (VW) diesel and they both are using about the same amount of fuel. 

The Passat will be a nice car to drive, just be sure to choose the right fuel.