I agree with you on all counts, NoCode. Many people forget that our Lord, with His forgiveness, also said "Go and sin no more," and didn't hesitate to call it sin.
This was also the reason why I decided to give my wife some finite amount of time (altho I kept my "deadline" hidden in my heart, and told her only that "my patience won't last forever") in order to end her affair. Because, at SOME point, "loving standing" turns into "condoning" of the sinful behavior, and I wasn't going to continue to put my stamp of approval on her adultery. My kids, especially, were watching to see how I was going to handle it, and I believe that NEITHER a quick kick to the curb nor a looong-term "standing" was going to be the best witness of my own faith.
Everyone must weight for themselves just what that timeframe is, and how much they can stand. I think a lot of it has to do with how well you are doing with enforcing your boundaries, and how civil things are. For me, it was six months, and thankfully I only had to go three.