This is an extremly bad deal for your use. Older UJM 's tend to not have a lot of collector value unless they are something very special. This bike is bound to be heavy, underpowered, and in need of some mechanical work just due to it's age (fork seals, etc.) You buy an old bike like this for a buck and a half, put another half a buck into it to get it up to speed and you are the proud owner of a 2k bike that is worth about a quarter of that.
Hello-oh....? Where are all the old geezers? A 1972 CB650 never existed! CB650 was launched only in 79'. Find out what is it exactly before proceeding. There might be a 1928 B.S. SS100 lurking underneath.
The smaller dual sport is an excellent suggestion. Have the ease of use of an upright riding position and the added ability to get in that all important low traction dirt riding experience is a must for anyone wishing to graduate to a bigger street bike.
As noted, this is probably a CB350. I think the best bike to learn on would be an EX500 Kawasaki. Fairly small, decent power and handling, and she wouldn't be embarassed riding it a year or two from now, thus saving you from having to buy her a new bike.
First of all,if its a CB650 its not a 72 and is way overpriced. If its a 72 CB350,they are befginning to come up in value but 1000-1200 for a n excellent example is closer to reality. CB 350's make a decent beginner bike if you can get it for 1000 bucks,but I have to agree with other posters that an ewer bike would be better. I bought my wife a used Buell Blast with 350 miles for 3 grand and she loves it....you can get older low mileage versions in VG shape for around the 2 grand mark(or less) and they make a great beginner bike.She rode a Rebel in her MSF class and didnt like the ergonomics and handling as much as the Buell.For comparison,she's 5'4 and about 110 lbs. I cant recommend the MSF course enough....it was pretty basic but the impact on my wife's confidence was amazing.
You might also want to check out a Suzuki Savage. I know, silly name but at 5' 5" your lady will fit it. And - chances are - it will sound cool because of the after-market pipes the previous owner installed, assuming you're buying used.
Don't listen to all the snobbery. An old CB650 would be a fine learner's bike. They had decent brakes and very linear power delivery.
However it appears that a lot of people who have these old Japanese bikes gathering dust are living in some sort of dreamland. They seem to think that the ridiculously high resale on old HDs somehow transfers to their old lackluster bikes. An old CB650, not a particularly popular bike at any time, isn't worth much. Even new it wasn't much more than $1650. I wouldn't pay more than $700-800 for it. Many parts are completely unavailable now. Federal law only requires importers to provide parts for 7 years, I believe.