I am a US citizen and now I have to file N-400 for my wife.
You cannot file an N-400 for her, she must file an N-400 for herself.
I completed 3 years as US citizen and she has been a permanent resident for 5 years now. So, any advise on what should I select as Eligibility. Is there any difference in terms of how the interview is done for both or are they same ? My wife's English is not that strong so asking. Also, can I join her in the interview?
Generally, given the choice, it is better to submit an N-400 based on 5 years of being an LPR rather than on 3 years of being married to a U.S. citizen, since 5-year based cases are more straightforward, require less paperwork and face less scrutiny.
The only exception is if the applicant had extensive foreign travel in the first two years of being an LPR but not in the last three years. In such a case it may be harder to prove satisfying the continuous residency requirement for a 5-year based application than for a marriage-based application. But, if this situation does not apply, it is better to submit an N-400 based on 5 years of being a permanent resident.
For marriage-based N-400 cases there are automatic extra requirements in terms of paperwork. In particular, IRS tax return transcripts would have to be submitted for the last three years. Also, for a marriage-based N-400 the IO will scrutinize the current state of the applicant's marriage at the interview to make sure that the marriage is fully intact. So there will be additional questions about the marriage and, depending on the answers and the particular circumstances, the applicant may be asked to produce extra supporting documents regarding the marriage and the spouse.
For a 5-year based application the state of marriage is irrelevant.
Regardless of whether your wife files a 3-year based or a 5-year based N-400, you will not be able to be present during her interview itself. The English test requirements are exactly the same for 3-year based or a 5-year based N-400 applicants.