Sounds like the PMA is up and your doing well, however, you are focusing a lot on negatives like her not seeing her kids. That is her choice, not yours. Just keep being the best dad you can and show them love. As for talking to the 2 1/3 year old, come on, my S is now 2 months from being 3, I asked him a lot of questions, he would say yes to anything I asked. But if I asked if mom was kissing big bird, he would say yes, so let it be and don't confuse the kids.
Also, lets get back to what you want. It seems like you are saying you won't wait around. Is this really the case? You either stand for this M or you don't. I honestly gave up on mine, and that is when things changed. But I'm not saying give up, I'm saying either stand or don't. If you choose to stand, plan on spending some time alone, taking care of the kids by yourself, and getting other things done. Lots of waiting. But I would suggest standing, I think you really love her and want it to work or you wouldn't be here.
Just let W run down that rabbit hole and see where it leads. I mean come on a man who provides, looks good for her, takes care of the kids, or a guy that plays the cool rif on his guitar in a smoke filled bar. He ain't slash, so really don't worry and start to laugh about it. She is fulfilling a fantasy and when we do that as people, we usually find the grass isn't greeener or much worse, how did I get involved in this nightmare.
Take a look at this way. Do you think he respects her? I mean another groupy! Haha, he doesn't care about her, and when she gets kicked to the curb for a younger one, she will be like what happened. Just wait it out.
I still can't get over a 20k retainer for a divorce. Although, then again I have seen much worse. But that is a joke.
