Does the request pass the sniff test? 

The eviction process in DE has become so tough and time intensive to do that we use an attorney as needed.

Use the capital from the headaches to go find a less time-intensive property... 

Yes you can you need to pass both tests. 7 days or less and the material participation test which I have outlined above 

Real estate investors are attracted to medium-term rentals to gain the benefits of extra cash flow versus long-term rentals while avoiding regulatory risks, high turnover, and intensive management of short-term rentals.While many investors are now turning to medium-term rentals to build their portfolios, the lending world has unfortunately been a little slow to keep up.

Testing them out see how it goes, but initial experience has been very good.

While a hand written addressed letter, I feel would get my attention a bit more.I won't be doing thousands of reachouts initially, just 250 or so per month so while letters would be more time intensive, I am open to it if the response rate is better.

The key is to test, test, test until it works.

It sounds like you are mashing a lot of different things together here.It does not matter at all if you have an LLC, or if you, or your wife is the owner - it doesn't change any of the tax positioning in the slightest.The test to be a qualified Real Estate Professional is at least 750 hours in real property trades or businesses AND  over 50% of your professional time. 

Recently, PM suddenly told me that this property needs "lead testing".My PM is not aware of this I already have 2-year lead certificate from the previous onwer AND assigned an inspector for lead inspection for me.