No, I do not believe that she has intentions of moving in with OM. I think she knows that'd fly over like a farting whore in church. But to be closer to him? Absolutely, unfortunately.
I think, for now, your children's ties to your W's family and the fact that she *really needs* your MIL to help with the kids -- and maybe, to a lesser extent, a lease-deal at her apartment? -- is going to keep her planted right where she is.
To your knowledge, have your children met/spent time with OM?
Also, your W is saying that "if she had the resources." The fact is: Your W is apparently about as independent and bull-headed as they come and believes that where there's a will, there's a way. If she *truly* wanted to be there, we both know that she already would be.
Don't project, bro. This M *can* be turned around. It just takes *a lot* of time and patience, especially considering where you are while having to deal with this.