So, will your Wife find out about her medical issue before you tell the kids? I just ask b/c you said that the plan would change if her condition were serious...I am sure you wouldn't tell the kids until you knew for sure if you were going ahead with things.
I find what she said very interesting. Sounds like she hasn't made up her mind for sure and maybe she is open to eventually sorting things out with you? If so, jump in my boat Jeff, there is plenty of room in here! Although, it is a sloooooow boat... (don't say that to Kalni though!)
I will be sending good thoughts out for your wife and her medical issues. Take care.