Newbie Question: Modify forms before render
I really wouldn't use jquery to wrap form elements renderend by Drupal. What if the user has javascript disabled ?

Drupal provides several core api functions for theming forms, one of those is
http://api.drupal.org/api/drupal/includes--form.inc/function/theme_form_element/7

place the function in the template.php file of your custom theme (change the function name from 'theme_form_element' to 'mytheme_form_element'

change the contents of the function to your liking, especially look at places where there's html markup involved