what I'm more concerned about is can this type of advertising be targeted simply from e-mail content ? In other words .. am I just being paranoid ?
Let me guess... your wife has a gmail account ? In which case, yes, it's a well known fact Google make use of email content for targeted advertising. The official line is that it's all done on an anonymised basis.
Simple fact of the matter is, it costs money to provide free webmail, so they've got to clawback the expense somehow ! (Not saying I condone such activities !)
However, if you've got an email account with your ISP, and something coincidental crops up on Google or other web browsing, then it is more likely to do with the web browsing activities of someone else in your household than with any transfer of email data anywhere (which isn't really a possibility technically).