Hi and welcome to CT!
There's some excellent advice in the above comments.
Here are your questions:
Q: For a plated meal to 40 ppl what amount of space should I be looking for in her home?
Without knowing the size and layout of the home, you want as much space as possible. I could not agree more with ChefBillyB's suggestion of 8 rounds and chairs along with the place settings, silverware, linens etc.
Q: She wants the cooking done on site and i don't have a cottage license to do it from mine.
That's fine. Generally speaking, if she is not opening her dinner parties to the public and doing them on a strictly private, social basis, there shouldn't be much in the way of regulatory issues. Your best move in this regard is to cover your bases with the local or state health department. You should, however, make sure that you and your staff are properly insured and factor the cost of that coverage into your fee.
Q: What items would you recommend for menu of such a large amount of plated meals?
This is where your creativity as a chef comes in to play. Generally, menu items such as soups, bisques, salads, pastas pretty much speak for themselves. They can be made in bulk and held rather easily. Where the issue becomes tedious is when the limitations of a home kitchen intersect with food items that won't allow the necessary volume of production you will need. By that I mean roasts, whole chickens/fowl, steaks/chops, fish etc. There's only so much that a home oven or stove can handle.
Q: Is there a rule of thumb regarding quantities I need to purchase. I know you estimate 1lb per pp for meats but what about veggies, apps, side..?
No. Its really a matter of math. Again, ChefBillyB has provided some good guidance as to how to go about accomplishing this task when it comes to sides and apps. However, 1lb per person when it comes to proteins for a formal dinner party is quite large. Try to imagine a 16oz filet Mignon or chicken breast or salmon fillet. Those are big portions and will likely produce a lot of wastage. These you would want to cut down to around 6oz per portion, give or take.
Q: Lastly, what would be reasonable for my time ?
Well, what do you feel your talents are worth? Obviously, you want to be well compensated for your efforts. You can charge by the hour or you can charge a flat fee. But, before you know what that magic number is going to be, you must first know what your overhead is going to be. How much are you going to pay your staff? In terms of food costs, the best method would be for the Doctor to pay for the food directly. That makes things a lot easier for you and eliminates potential disputes. It also makes the calculations for your fee a bit easier. You will want to generate a profit between 20% and 40% to make it worth your time. You can start out on the lower end of the spectrum to generate some good will and trust, if you want. But, eventually, you will want to get it up to that magic 40% mark which should be calculated AFTER you pay your staff. Remember, like ChefBillyB said, pay your staff well so they will want to return to the next party. You are dead in the water without a good wait staff and kitchen staff.
Lastly, this relationship is something that both you and your client should take your time and discuss thoroughly in terms of what's expected from both of you given your respective roles. Treat the matter strictly as a business relationship. Lay out the expectations in writing. It doesn't necessarily have to be a formal contract. But, writing down what is expected from each of you will really go a long way in preventing possible disagreements down the road. Provide to your client your professional opinion in terms of what the kitchen and dining area will need in terms appliances, cookware, utensils, holding equipment, tables, chairs, linen, silverware, glasses, salt and pepper shakers and so on.
Good luck.