This happened at our residency several years before I started. To answer your questions:
1) Yes, I would view it as conflict of interest to have a senior resident be supervising their spouse as a junior resident, especially if there are other junior residents on the service. It probably doesn't matter if both residents are on, for instance, a derm rotation (where both residents function similarly and do not evaluate eachother).
2) If your program is large enough, this could easily be avoided by just not scheduling the spouses on service at the same time.
3) Our program had viewed it as a different issue when the spouse (senior and junior resident) were on call together. We only had 2 residents (a junior and senior resident) on each night so nobody could play favorites.