Sell it off to someone that needs it,
use the payment to pay off most of the car loan,
the difference in the short sale will be due to a lack of negotiation on each end, and the slight depreciation from driving it off the lot. It might not even be that large if you're undercutting the dealer by $1k or 2 enough to get someone interested. It will depend on the state and mileage of the vehicle, hopefully you can recoop most of your expenses though.
Next, you will want to buy a used car, and preferably a hatchback for the additional backspace to help with ferrying the two ferrets.
Get input from the driver and show her the figures and why this vehicle is not suitable and what you are thinking might be a better fit. You might need to get started on the car before you can sell off the Pilot. It'll be easier to explain to sellers that there's nothing wrong, it was simply too bulky of a vehicle for your wife to drive well (take one for the team Mom!)
I think this, is your way out, which I guess is similar to option 3.
Though the term 'trade-in' is usually reserved for returning it to your dealer for a few grand off your brand new vehicle, which you are buying from then... again! Which is clearly not the option you are looking for.
Options 1 and 2 are resigning to the payments, maybe selling it later rather than handling the problem right away before the depreciation compounds further. This will be a short sale. You fell in to that trap when you bought this vehicle. That's the lesson, but I'm confident you can find some way to recoop most of your losses here. Best of luck!