I love to hear your compassion toward your wife as expressed by your reluctance to pile emotional trauma on emotional trauma re: her mom's health. It's a beautiful thing.
But equally, it's beautiful (or at least, mature) to have a good honest handle on your personal limits. If it's regularly and significantly damaging your emotional and mental health to sleep next to her ... which is sounds like it is .... it's GOOD that you have moved to change that.
So, you have made a change. She will not be sleeping in the same bed; you will not be participating in gestures of affection (at least, that's what I assume from what you wrote.) As you say, all of a sudden she can't claim it's all you you you holding on like a pit bull.
I'd be inclined to sit with that much change for awhile; see where it takes both of you. The problem with making too many changes at once is it gets really hard to interpert your data when your situation either improves or devolves. (Not that you can accurately interpret anyhow -- too many everyday life variables -- but a bunch of change at once makes it even messier. IMHO.)
Nice to see you back; well, you know what I mean.
"Show me a completely smooth operation and I'll show you someone who's covering mistakes. Real boats rock." -- Frank Herbert