Would you recommend a faster processor and more RAM? Would love some feedback.
I'd get more RAM. We always add more RAM when we get a new computer, Macs just never come with enough.

ALSO - on a regular PC, regular maintenance is done by disk cleanup, disk defrag, etc. Are there any maintenance procedures for a Mac?
Not really. Whenever she's online if there are any updates they will automatically notify her, she just has to give the go ahead for the updates to download.

the owners of the iMac believe it is best to turn the computer off at night as it helps keep it 'cleaner'. They say they have to do this at least every couple of weeks or it will clog up.
I've never heard that or done it. It's certainly not hurting anything though. Quitting your applications (especially with their search engine) at the end of the day or logging out of their account (which will quite the applications) will help keep things from "clogging up". Or they can just periodically empty their cache. There's something called "Activity Monitor" that... well... monitors your activity- it will tell you what is hogging all the memory.