CG is fun and passed the "interesting/chemistry and warrants further exploration" hurdle.
You enjoy CG's company - but don't know him well enough to know where this R is going right? And you probably don't know him well enough to know if you want a long term commitment yet do you?
CG is gunshy. He is communicating his fears with you. Clearly he is interested. If he wasn't - he wouldn't bother talking about how he feels - right?
Sounds to me like things are going well. You are both interested in each other - but are taking things slowly.
Remember his fears have nothing to do with YOU - it is about him. So don't define yourself by HIS fears.
You are a secure and confident Goddess right? So you can afford to him a little space - knowing he will come back to you. And if you give him the space he wants right now - he will appreciate you even more for giving him space w/o any judgement when he comes back.
I like what your friend said. How about "I understand. Give me a call when you're free and we can get together to do something. Have fun with your kids next week"
The early stages of dating is like fishing my friend. You have to give the line a little slack at times - if you try to reel it in too fast - you lose the fish.
Relax and enjoy the initial part of this R. It is going just as it should.
And if you give him the space he wants right now - he will appreciate you even more for giving him space w/o any judgement when he comes back. 
