I took my wife for a ride (about 40min) on my 05. My wife weighs about 200lbs (she's tall and 3 kids) and I weigh about 175. Anyway the next day I went for a ride and the rear seemed a little lower and it felt sluggish in the corners. Is it possible that the rear suspension could have gotten compressed from the extra weight. If so, how do I get the settings back to where it feels comfortable? 98% of the time I'll be solo.

Get a seat cowl and remove the rear pillions, then start palying with the settings.

200lbs isn't going to do anything permanently. Not sure why it would feel sluggish after riding with a passenger, usually it's the other way around.