Note that if you are French, the situation is different. I assume that you are not French.
Are there any advantages in applying as the spouse of an EU (Schengen) citizen?
Yes, but if your wife's experience is anything like my mother's, they'll tell her not to apply. If my understanding is correct, whether or not she gets a visa beforehand, she will need to apply at the préfecture within 90 days of arrival in France to remain in France for longer than 90 days.
She doesn't need a visa to enter because she's a Canadian citizen, and you're an EU citizen, so she enjoys freedom of movement in the EU when she travels with you (or to join you) there. Non-EU family members in this situation are only supposed to be required to have a visa if they're otherwise required to have a visa to enter the Schengen area for short stays; as a Canadian, she is not.
I have found somewhat contradictory information on the web. Some sources say the visa should be free.
That is correct.
Would the French long-stay (visitor) visa be multiple entry? We would like to travel inside and outside Schengen during our stay.
She'll get a residence permit that will allow her to enter and leave freely. More importantly, whenever she travels with you, or to join you, she is not required to abide by the 90/180 limit that normally applies to visitors in the Schengen area. Just take your marriage certificate with you, along with your EU passport or identity card, of course. The most important thing for you will probably be to get your marriage certificate "legitimated" with an apostille. The jurisdiction that issued the marriage certificate should be able to explain how to do this.
Will it be a problem to stay in another Schengen country (for family visit) for a couple of weeks before we first enter France?
No. Once again, when your wife is with you, she has a legal right to be with you. This is much stronger than the "privilege" that is normally in play when someone enters a country of which he or she is not a citizen.
On the OFII form it mentions something about entering France at most 5 days after entering Schengen! Is this true?
Regardless of whether this is true for others, it will not apply to your wife.
The European legislation is the freedom-of-movement directive, 2004/38/EC, which is "transposed" into national law by each member state. French implementation is described (in French) on the French public information site in an article called Européen en France : entrée et séjour de moins de 3 mois (European in France: entry and stay of less than three months). An excerpt:
Pour entrer en France, les membres non européens de votre famille doivent détenir :
- un titre de séjour en cours de validité, délivré en tant que membre de famille d'Européen par un autre pays de l'EEE ou la Suisse,
- ou un passeport valide revêtu d'un visa de court séjour,
- ou un document établissant leur lien familial s'ils sont dispensés de visa en raison de leur nationalité.
To enter France, non-European members of your family must have:
- a valid residence title for a family member of a European, issued by another EEA country or Switzerland,
- or a valid passport with a short-stay visa,
- or a document establishing their family relationship if they are exempt from a visa because of their nationality.
This last item describes your wife, and accounts for my recommendation to carry your marriage certificate.
[I imagine you might ask:]
But you said she needs to apply within 90 days to stay for longer than 90 days, how is that consistent with having a right to be in France?
The answer is that EU states are explicitly allowed to make that right conditional on registering with the authorities by a certain deadline, which cannot be shorter than 90 days. Such registration is evidenced by a "residence card" (notice how it is not called a "residence permit"). The penalty for failing to do this must be proportional to the penalty for a country's own citizens failing to get a national ID card (accordingly, there is no penalty for this in the UK, which doesn't have national ID cards).
Once she arrives in France, the registration and card cost €25 if she applies within 90 days of arrival, but €340 if she applies after that. That's it. She can't be deported or banned for a late application. This is covered on the public information site in Carte de séjour "de membre de la famille d'un citoyen de l'Union/EEE/Suisse", again in French. This page also lists the documents you must present to support the application.
A nice bonus: when your wife travels as a "person enjoying freedom of movement," she can go to the "EU passports" line at countries implementing the Schengen Borders Code.