We are fixing to sell one of our vehicles to a co worker of mine and I want to make sure I have this in order.

Wife and I are both listed as owners on the title fwiw

We both have to sign at the bottom of the 130-U?
We both have to sign the back of the title?

We then fill out the form online about vehicle transfer notice.

Also, I was hoping to do this one day while I'm off. Does my wife need to be present when this takes place or can she sign the papers in advance and I handle the rest on my time? Was also going to fill out a generic bill of sale for documentation as well. Anything else I'm missing paperwork wise?

Just go to the tax office in person, both parties together

Fill out the back of the title with the odometer reading and both you and your wife sign it.

Fill out a 130-U.

Take off your plates and keep them. DO NOT LEAVE THEM ON THE VEHICLE. Fill out a VTR-346 to have the state take the vehicle out of your name. This is for your protection and the seller does not need to sign, but you'll need their basic info.
https://www.txdmv.gov/sites/default/files/form_files/VTR-346.pdf

Every one I've bought private has also involved a bill of sale just for CYA purposes. It's also a good way to get the buyer's info for the VTR form.

The buyer can get a vehicle transit permit. It covers them for a few days until they can get to the tax office, register the vehicle, and obtain temporary plates.
https://permit.txdmv.gov/Permit/VTPermit

It's a really simple process. No need to waste a ton of time at the tax office. Just be damn sure that you fill out your VTR-346 immediately after the sale to clearly separate your liability from the vehicle. Give it a few days and check on the DMV site to run a check to make sure they've processed your VTR form.

So can my wife sign the title and other paper beforehand and not be present the day of sale?

She doesn't need to be present. Just sign.