Spouse of EU citizen travelling to Malta - Questions

Hello everyone, long time lurker but first time poster so go easy on me! I have some questions regarding how my wife and I need to go about applying for a Schengen visa for her to accompany me to Malta. Apologies if this is covered elsewhere but I could find no post that provided all the answers I am seeking....

In short, I am a British citizen temporarily living in Peru with my Peruvian wife. We are planning to move to Malta in August of this year and would like to better understand what is required for her to obtain a Schengen visa as the spouse of an EU citizen. We are intending to settle in Malta and as such, I intend to exercise my right of free movement in accordance with Directive 2004/38/EC of the European Parliament. My wife will travel with me on all stages of the journey to Malta.

If anyone could help answer some, if not all, of the following questions, I will be eternally grateful!

1) We are both currently in Lima, Peru. However, Malta does not have direct representation here and instead, is represented by the Austrian Embassy. Does her application for a Schengen visa therefore need to be made in accordance with Austrian requirements for the issuance of such visas, or in accordance with Maltese requirements (if, indeed, they differ)?

2) As there are no direct flights from Lima to Malta, we are intending to first fly to Madrid and then from Madrid to Malta. I assume that by applying for a Schengen visa to the Austrian embassy that represents Malta in Peru, there would be no problems with us entering Madrid on this visa?

3) Do I need to buy airline tickets before applying for the Schengen visa or can I apply for the Schengen visa before I book my tickets?

4) Is there a requirement for the issuance of a Schengen visa that my wife must have a return ticket to Peru even though we plan to settle in Malta indefinitely? Do I similarly need to provide proof of a return ticket to somewhere outside of the Schengen zone? If not, will we encounter problems if travelling to Malta on one-way tickets?

5) As we are looking to settle in Malta, does my wife need to apply for a long stay Schengen visa (i.e. one that would permit her to stay in Malta with me for more than three months)?

6) Eventually, we would like to make a couple of short trips from Malta to other countries in the Schengen zone. Does my wife therefore need to apply for a multiple entry Schengen visa?

7) What documents, if any, will we need to present on arrival at the Spanish and/or Maltese border(s)?

8) Having already contacted the Austrian embassy here in Lima, we have been told that my wife needs to provide personal financial accreditation/employment record, travel insurance valid for the Schengen territory and duration of travel visa, as well as proof of accommodation in Malta. I believe this to be incorrect as according to the "Handbook for the processing of visa applications and the modification of issued visas Additional documents may not be required regarding the purpose of travel and means of subsistence (e.g. proof of accommodation, proof of cost of travelling) What is the reality here?

9) If my wife is required to have travel insurance for the Schengen zone and given the fact that we intend to remain in Malta indefinitely, for what length of time should we purchase cover?

10) As we got married here in Peru, our marriage certificate is in Spanish. I assume that we will need an apostille for this. Could we get this done at the UK embassy in Lima, or does this need to be done by a Maltese representative in Peru?

11) Does our marriage certificate need to be translated to English in order for us to apply for a Schengen visa?

12) Do we need to include a covering letter in the application and if so, what sort of information do we need to provide?