I think it's so sweet that you and your wife make each other gifts each year. What a heartfelt approach that could be great for your finances too!
My brother once made me a handcrafted wood cutting board that I cherished very much. The one he made was square with a lip or edge that captured veggie & fruit liquid (for easy cleaning). If your wife likes to cook, perhaps you could make her one in a heart shape.
Another wood-working idea: a handcrafted jewelry box with an item inside (earrings? necklace? ring? you decide!). Or take a beautiful tree branch or stick with lots of arms and character (interesting knobs? coloring? unusual shape?), attach it to a sturdy base, and present it with a necklace or earrings hanging from one or more of the arms. I've also seen earrings made from wood, so that's another idea to explore.
It would be good if you gift her something unconventional, something that she may not expect. Since, it's Valentine's day I think one gift that really boosts the confidence of a woman is a sexy piece of clothing. This might sound a bit weird, but having experienced this myself, I can say that husband gifting his wife stuff like sexy lingerie or bikinis or swimwear can really make her feel good about herself. I had this experience when after 7 years of marriage, my husband gifted me for the very first time in my life, a stunning piece of mix-and-match bikini top and bikini bottoms that he had purchased from my favorite store - http://www.dollboxx.com.au/collections/push-up-bikini . I felt really special by that gift. I can't express in words my feelings that day. You see when you're in a relation for a long time, it becomes a routine and the spark begins to fade away. You do not compliment your partner as frequently as you did earlier at the start. But such gifts can really help in rekindling your romance and strengthen your bond. Your idea of making gifts for your wife on V'day is really good. You can make a wooden photo frame for her with your names engraved on it. Apart from it, if you wish to gift something unconventional, you can consider my idea.
First of all, you sound like a sweet guy! Good job!
a) Engrave your names on a wooden heart
b) Give her some of your time to help her make anything she wants
c) Write your couple "motto" Ex: "We love always and laugh forever"