Bruce, not sure how their custodian would know what their MAGI is, but the 2016 excess would be subject to the 6% excise tax on a 2016, 2017 and 2018 5329 for each spouse (3 years for each spouse). Apparently, no distributions have been made during this entire period.
One option they have is to request a return of their 2018 contributions with earnings. This action creates unused space for the excess amount at the end of 2017 to be assigned on Form 5329 for 2018 as a 2018 contribution. That will eliminate the 2018 excise taxes. Any earnings on the removal of 2018 contributions are taxable in the year in which the 2018 contribution was actually made. That would mean an amended 2018 return if they have already filed. Total excise taxes would be 4.
Q 2 – Instead of the above, if eligible for 2019, they could end the excess amount by not making a 2019 contribution (except for the amount of the 2019 contribution limit increase) and Form 5329 for 2019 would then assign the excess to 2019. They never have to touch their Roths or contact their custodian, but would still incur 6 excise taxes through 2018.
But if the 2018 contributions have not yet been made, they would not need to be removed and if eligible the 2017 excess would be assigned to 2018 on a 2018 5329. Total excise taxes now 4 instead of 6. 5329 forms only needed for 2016-2018.
With all of these options, they end up losing Roth space for 1 year during the period 2016-2019. 4 years, but 3 contributions allowed.
The IRS may or may not bill late interest for late payment of the 2016 and 2017 excise taxes.