My W sees things in black and white. You can only love ONE person. I've always seen things in shades of gray.
I am going to go out on a limb and extend this to say that she doesn't know how to "love" her kids AND you...
Forget other man, that was fantasy, not love and zero evidence that she understands what love is or is capable of loving more than one person at a time. "The kids," I would classify as one entity. Her mom and sis, one entity...
I find it really revealing. She feels spread too thin when she tries to love more than one at a time. This also explains her lack of energy expenditure, her not having so many friends etc.
She sounds co-dependent and her idea of love is compulsive attention mentally and physically focused on one entity (the kids)...she has guilt even accepting that she needs to "love" herself.
I think you are helping her as best you can and keep going. I also think she needs C. I am learning quite a bit about myself in this thread. But, I have been able to see how my co-dependence has influenced my behavior and I am changing slowly...your W needs to wake up and she may need to lose in order to do it.
Listen to Coach and all of the experts here. Work hard and see what happens...
