[0] I would use honorifics, but they are married which makes it a bit confusing. [1] Which I never took but was well regarded when I was an undergrad
We collectively resolved the dilemma by all agreeing to be on a first name basis. Now that I've spent significant time in industry and have worked with more people with PhDs than were in my department in grad school, I've come to realize I was being a little bit silly. In my experience, at least once you get to the graduate level, anybody who insists on being called "doctor" seems a little full of it to me. That said, I still think it's appropriate for undergrads to call their professors "doctor," when applicable, and I was always careful to do so whenever I was in the presence of any undergrads.
Careful, this apparently is blasphemy these days.
However, in other countries, you would not call someone "professor X" unless they actually had the word "professor" in their job title. Here in Australia, a lot of academics don't – you start out as a "Lecturer", then get promoted to "Senior Lecturer", then "Associate Professor", then finally "Professor", and calling a lecturer "professor" is not done. And you certainly wouldn't use the word "professor" when addressing a PhD student.
But my question was about "professor" though, not "doctor". You say you wouldn't call a grad student instructor a "professor", but what about an instructor with a PhD (but without any formal academic title of "professor")?
When I was a grad student, I made a point when introducing myself on day 1 that I was not a professor, so please don't call me "Professor Pmiller2" Then, I said something about "if you call me "Mr. Pmiller2," I'm going to wonder if my dad is standing behind me, so, please just call me "$FIRSTNAME." That was pretty much the standard where I was among people in my department (grad students = first names).