Family Sharing Music with different iTunes settings

I upgraded my Music plan to the Family so wife & her mother can both use. But want to verify a couple things.

Wife & i both listen to same sort of music so any iTunes purchases we make we would like it synced to our appleid. Her mother though has her own iTunes account. She would like to stream Music via her Watch while walking, but we want her own iTunes downloads to be available to her only, not us, and we don't want her music showing in our Music library

Is this possible? I have looked through the settings in our iPods & it looks like we can use different accounts for the iTunes. And then there is a setting in Music for iCloud. Before i start adding accounts, i want to make sure there is way to keep our iTunes libraries separated.

It would be great if there were individual permissions per device/family member, instead of it being global across the entire service.