You both need to realize that grad school is not the be all end all you are making it out to be. Yes, it is important if you want to be a part of academia, and yes, it can help you get a job later on. However, you shouldn't make yourself sick over it. It really isn't that glorious, I promise. You do a lot of homework, you read a lot, study a lot and question everything you ever do a dozen times. Obviously you are both very interested in getting in, but always remember that if you don't, there is always next year, or you could work your way up at a lab/institution from an entry level position.
Just relax. I was rejected outright from my 3 choices during my first run at a Master's. I got rejected from my Alma Mater AGAIN in round 2, while getting in to 3 other programs on my second try. However, I was a very low pick and was accepted to a decent program, a pretty good program, and a cash grab program in the UK. Now, after slugging out my MSc for a year and a bit now, have been (so far) accepted to everywhere I have applied including very high programs that are extremely competitive where they only take 15 people once every 3 years from the entire world. Except for one program in Germany that I completely bombed the interview on...but hey, that was 6-7 months ago and it didn't hurt me in the least. You win a few and lose a lot.
So, stay persistent, but never let rejections hurt your self esteem. Your identity should never be entwined with your admission or rejection from a graduate program in which there are SOOOOO many factors far outside of your control. Depending on the year you apply, you would either be a shoe-in or outright rejected.