Hi, Mr. P,
I think you may have misunderstood DocV's statement that both are not correct. Technically, it's ambiguous, but he was responding to your use of "if they are both correct." What he was saying, therefore, is that it is not the case that both are correct.
So, DocV did NOT mean that both are incorrect. He is saying that options (12d) and (12d') are correct. He does, however, mean that "stopped" is incorrect, and I agree with him. To see why it is incorrect, it may be helpful for you to look at a different case, where things are perhaps more clear:
(X) He wishes she would help him.
(Y) He wishes she helped him.
Both of those sentences work. Sentence (X) essentially expresses a wish that she would consent to helping him, and (Y) a wish that she did something that she habitually does not do. Apply that to the rain example. We can wish, so to speak, that the rain would (consent to) stop.
With "stopped," the sentence is a bit off. "She wishes it stopped raining" means that it habitually does not stop raining, and he wishes that it did habitually stop raining. But that meaning, which is somewhat strange in itself, is inappropriate here given that the example implies that Salma is in England only temporarily.