My wife is using Office Word 365 on a Windows 10 platform. When she presses File/Save when she is updating a document, the system saves the file to OneDrive - Personal/Favorites/Documents. It does not save the file to the Word folder under the OneDrive folder. Hence, the file does not get uploaded to OneDrive for sharing on my device. How do I correct this?

You and your wife have different OneDrive accounts, or should. She can give you a share link to a file or folder, or vice-versa.
How to share (or unshare) files, folders, and documents, using the OneDrive website | Digital Citizen