I had some instruction a few days ago (to find out what bad habits I've accumulated), and after checking my bike and handling away from the road, and working through some scenarios on (almost) empty residential streets, the traffic section worked like this:
- start on a quiet side-road, or in a safe spot at the side of the road
- discuss a manageably short section of the journey: what junctions and manoeuvres are involved, where you're going to stop
- instructor generally hung back to watch what I was doing
- finish the section as discussed, analyse it, and then discuss the next section
On longer straight sections, the instructor would ride alongside (traffic permitting) and discuss the next (or previous) step. You can (we did) segue straight into the next leg of the journey if there is enough time and space to talk it over on the move.
The important thing seems to be that you both know where you're going, what junctions or road layouts are involved, and how to approach each one.
Remember that leading (or instructing) is about building both parties confidence: your SO will enjoy it more if they know what they're doing, and you'll enjoy it more if you're confident in them.