You're correct that "o" is US and "ou" is non-US. It'd be considered bad style to switch between them in the same text. Generally, you should just choose one style and use it consistently, and you will be understood. I've heard a rule that if you're writing for a mostly American audience, you should use the American spelling, and otherwise use the international forms, but that may not even be necessary.
One place that mixing styles is allowed is when quoting verbatim from text, or in technical literature where spellings must be retained exactly:
I asked him what colour he wanted, and he said "I'm no good at picking colors".
The color: #ffffff;
property indicates a text colour of white.
The spelling change from 'y' in Middle English to 'i' in Modern English in such words as wife or time is actually a consequence of the phenomenon known as the Great Vowel Shift.
In wikipedia's chart you can follow the path for the sound now in time in the leftmost column.
And the corresponding IPA steps are summarised as follows:
Middle English [iː] diphthongised to
[ɪi], which was most likely followed
by [əɪ] and finally Modern English
[aɪ] (as in mice).
Old English
Going back to Old English, the most common spelling for wife and time would be:
For wife wīf and it would be pronounced something like "weef" /wiːf/1 (actually the bar over the 'i' is a modern typographical convention to distinguish long from short vowels as OE does not have this distinction in spelling).
For time tīma and it would be pronounced "teema" /ˈtiːma/1.
The letter 'y' in Old English does exist but it represents the sound /y/ (as in German 'ü' or French 'u'). See for instance lȳtel /ˈlyːtel/ => "little". Wīf insteadis is pronounced with a long i /i:/.
In Old English the spelling wyf would have been a spelling mistake - the correct form being wif.
Middle English
The upheaval triggered by the Norman Invasion, which eventually gave birth to Middle English was marked, among other things, by a change in the spelling conventions. The usage of the letter 'y' was generalised for all words with the sound /i/ or /i:/, thereby following the rules applied in medieval French.
Therefore, the spelling of /wi:f/ as wyf became the rule.
Late Middle English / Early Modern English
Indeed a close examination of the very quote included in the question suggests that the 'y' is pronounced 'ee' as in beauty and not 'eye' as in why. This is visible in some of the words I have highlighted.
I amongst other have indured a
parlyament which contenwid by the
space of xvii hole wekes wher we
communyd of warre pease Stryffe
contencyon debatte murmure grudge
Riches poverte penurye trowth falshode
Justyce equyte dicayte opprescyon
*Magnanymyte* actyvyte foce attempraunce
Treason murder Felonye consyli …
[conciliation] and also how a commune
welth myght be ediffyed and a[lso]
contenewid within our Realme. Howbeyt
in conclusyon we have d[one] as our
predecessors have been wont to doo
that ys to say, as well we myght and
lefte wher we begann.
As you probably guessed many of the words above are verbatim French spellings.
I've checked online for instance the words justyce, felonye and penurye.
Also, keep in mind that the GVS only affected long vowels, so that not all the words above spelled with the letter y are now pronounced with the sound /iː/.
The thing to notice is that, at the time of Thomas Cromwell the normal spelling of wife was wyf (Middle English) or wyfe (Early Modern English) and that it closely matched its pronunciation (/wɪif/).
Modern English
However, the Great Vowel shift was only starting and the next step after passing from OE wīf /wiːf/ to ME wyf /wɪif/ would be to pass to eModE /wəɪf/ and eventually to ModE /waɪf/ wife.
As the pronunciation shifted, so did the the spelling. The most common letter for the diphthong /aɪ/ being the letter 'i' 2 the new spelling for /waɪf/ became our familiar wife.
Note 1 The spelling used for Old English is a new system at the time of king Ælfred. It is based on an extended Latin alphabet and it closely reflects the pronunciation of the time. Although there are inevitably some spelling variants, we are pretty sure of the pronunciation of such common words as
wīf and
tīma.
Note 2 Looking no further than the first person pronoun 'I'. Interestingly enough this can also be observed in the same quote if one considers the word
contenwid (which is actually included twice but with slightly different spellings).
Best Answer
I have researched this topic as well. I would like to point out a few aspects to this discussion that may be useful. First of all, it is correct (and Wikipedia says so as well) that today's Australian publications, including newspapers and digital media, almost without exception (except for certain proper nouns such as the Labor party and Victor Harbor) follow the UK norm of "-our" endings. It is correct that several Australian publications in the 20th century preferred the "-or" endings. Newspapers such as "The Age" from Melbourne and "The Advertiser" from Adelaide used the American "-or" spellings until the middle of the 1990's. They changed to British spellings in the second half of the 1990's probably with the advent of digitised and computerised publications. I think a similar trend occurred in Canadian newspapers as well.
I should add, though, that it is probably not accurate to claim that Australian spellings "changed" from American to UK norms. This gives the spurious impression that American spellings used to be preferred to UK spellings in the early 20th century. That seems to have never been the case as I argue below.
First of all, even when "-or" endings were more conspicuous in Australia, they were certainly not exclusive and co-existed with "-our" endings. For a Victor "Harbor" in South Australia, spelt without the "u", there was a Sydney "Harbour" bridge that was always spelt with the "u". Also, the "-or" spellings were probably the ONLY instances of American spelling norms co-existing in Australian publications. The more conspicuous differences such as "realise", "organise", "analyse" were always spelt using British/Commonwealth norms instead of the American style of ending with "-ze", as were "theatre" and "centre" or even "manoeuvre" (American spellings prefer "-er" endings), as also were "modelling" and "travelling" (American english prefers single "l"). It is, therefore, not correct to say (only on the presence of "-or" endings) that Australian spellings used to be closer to American spellings in the past. That seems never to have been the case. In fact, in spite of the use of "-or" endings, overall Australian spelling norms have always been closer to UK norms.
This, in my mind, also belies the argument that the prevalence of American dictionaries were the cause of American style spellings. I think the "-se/-ze" differences between American and British spellings are much more frequently seen in writings across the world than the "-our/-or" endings. Had American dictionaries been that influential in Australia, then the "-ze" endings (and the "-er" endings) would have likely been adopted in Australia as well. They never were.
To my mind, the most logical reason for the almost universal acceptance of British spelling norms in today's Australian English, including the apparent abandonment of the "-or" endings, took place because the "-or" endings, though seen more often in the early 20th-century than now, were never dominant and were still considered somewhat anomalous. With spell-checkers and computerised publishing, it would be easier to follow one norm, either UK or US, for spellings. The UK spellings were adopted probably because they were always more prevalent. Today, the only conspicuous American spelling in Australian media comes from the Australian "Labor" Party due to historical and political reasons (although "labour" with the "u" is the preferred spelling in all other contexts), and the use of the spelling "program" instead of "programme" in all contexts. Note that the Democratic Labo(u)r Party in Australia, that used to also spell "Labor" recently switched back to the UK spelling with the interesting comment: "Putting (YOU) back in Labo(u)r!" Perhaps the Australian Labor Party will also bring the "u" back in Labor in the not so distant future.
Finally, the near future of Australian spellings seems to be much more closely aligned with British norms. UK spellings are taught in schools, and in spite of Americanisms pervading all aspects of Australian society, including language, Australians probably will likely not change to American spellings because doing so may appear as a new type of cultural colonialism. If Canada, the next-door neighbour of the US, retains mostly UK spellings, it is difficult to see how and why Australia would switch to US spellings. Funny that all the commonwealth nations (read India, Pakistan, Singapore, Hong Kong) have taken to shunning so many practices of their colonisers (the British), but have all retained their spellings!