Aloha,You should simply send the denial letter and when they call/confront you again advise them a decision was made on their application and it was final.You need a clear procedure for accepting applications, and need to follow it every time.

It's totally to avoid the discomfort and confrontation.

Work for blocks of quality time with your wife, work to de-escalate confrontational situations, work to enjoy the time you have together.2.

If they are afraid of a violent confrontation, then they can call the police for an escort.

If you put things off and can’t handle confrontational issues then my recommendation is for you to get a PM.   

Asking what other properties they own in the area is a good, non-confrontational way to vet them as a buyer.4.

The investor then has to confront the fact that they were scammed a bit (or a lot) and decide what to do.

Is it better to ignore these or give a more confrontational "no" as an answer?

@Tom BrickmanWhen I read the title I thought there was a face to face confrontation where the tenant actually stood toe to toe with with you and put up his Dukes.After reading your story I believe this is a misunderstanding that needs to be taken care of in a face to face conversation and not by text.A lot can be lost in translation in a text message. 

I had confronted the tenant and she denied there was smoking in the house.