Digital lifestyle coaching systems must personalize peer support as user behavior and engagement evolve while preventing personally identifiable information (PII) and sensitive health information from leaking into analytics and AI pipelines. This creates a practical tension: personalization requires longitudinal linkability, while privacy engineering requires minimization, separation, and controlled re-identification. We present PRISM-Coach, a stakeholder-centered architecture and adaptive peer-group assignment method for privacy-preserving lifestyle coaching. PRISM-Coach separates each user into four bounded views: Identity, Operational, Learning, and Coaching, each with distinct access controls and risk profiles. Building on this separation, the system uses vault-based controlled identity restoration, a privacy-constrained contextual bandit to assign users to eligible peer groups under coach-capacity and stability constraints, and a human-in-the-loop coaching assistant that generates de-identified summaries and draft messages without sending raw PII or PHI to external AI services. We instantiate PRISM-Coach in a commercially deployed lifestyle coaching platform and evaluate it using three years of telemetry from approximately 2,800 users and an in-app needs assessment survey. At the population level, daily check-in adherence increases from 0.35 to 0.68, and engagement rises to 1.35 baseline. In a matched 19-week comparison window, the AI-enabled workflow achieves adherence of 0.74 versus 0.48 under static grouping and higher average weight loss: 5.2 kg versus 3.1 kg. Survey results show that 82% report positive perceived benefit, and 92% report increased privacy confidence after transparency disclosures. These results position PRISM-Coach as a practical blueprint for privacy-by-design adaptive learning systems in everyday wellness.