How to run two accounts of the same Steam game

buying two copies off one steam account

This isn't possible for any Steam game, so I don't think it will be possible here.

one copy per steam account. If this is the preferred option, can they both use the same installation location?

Yes, this is correct. You can log into two different accounts on the same machine and it will use the same game files, only with saves stored in different folders.

Option two is your choice.

Steam Family Sharing is made for exactly this situation.

You can authorize up to 10 devices and up to 5 accounts to have (almost) full access to your Steam games without being considered the same user or using the same save files. If an authorized user (your wife, on her account) is playing on an authorized device (your computer), then she can play without you having to purchase a second copy.

Note that Steam Family Sharing cannot be used for some games which use additional CD-key or other authorization besides that included in Steam. Since No Man's Sky is not yet out, it is as-yet unknown whether it will be in this category, though personally I'd guess that it is not.