Brian,
The best article on the Price ballad is in Folk Music Journal 25 1989, Vol 5, Number 5, pp592-607, by David Atkinson.

The above quote is paraphrasing William Chappell writing about the ballad in The Roxburghe Ballads Vol 3 p200. in 1880.

Here's what he says
'This is a tale of a married woman who is prompoted by the spirit of her deceased lover to leave her husband and three children, and to go with him. She had waited three years for her lover, and heard that he was dead, before she married; so, this being the seventh year, she was badly treated by this member of the spiritual world. her husband hanged himself, and she was never heard of more. the warning to other married women herein conveyed (unless it be against the tricks of evil spirits) is rather obscure. Of course, it did not occur to any one that the old lover could have returned in the flesh. The miracle saved Mrs Jane Reynolds's reputation.' My comment is based on the last 2 sentences of Chappell which, having studied many similar ballads, I think is probably the case. The supernatural was widely believed in in the 17th century and ballad writers often used it to hammer home a point or make a ballad more dramatic. But David is much more qualified than I am to write about the history of ballads, although I am often very honoured when he consults me or complements me on my papers and presentations.

Riddles.
No, Brian. The 17th century rewrite is simply a wit combat prior to marriage between a knight and a maiden as in most oral versions that contain more than just the riddles themselves. So your second type.