I really wish you would keep family out of it. It will do no good at all. This is between you and your W and that is it. You might think its okay or not causing more damage but it is.
What you seem to NOT realize is it works both ways. She wants to be able to trust you but YOU also need to be able to trust her and see her changes are true and real.
I am simply telling you what I would do in this situation. I would wait a week or two and then talk to your W and keep it very brief and leave the ball in her court.
I would say "W, I understand trust is an issue for BOTH of us however I feel its no longer productive for me or the children to live in a situation with such loose parameters. I have given this quite a bit of thought over the past few weeks and I know I must move forward with or without you. If your desire is not to work on our marriage then I feel its best *I* proceed with a divorce and focus all our energies on being good co-parents"
I might even go as far as to say that you have retained counsel and had papers drawn up but you wanted to give her a bit of time to think about it before you went ahead and filed and had her served. Don't give her too much time, let her know you have given your attny permission to execute the papers on xx day.
I think the talk your W had with your BIL gave you some false hope. You already knew she found your inability to make decisions unattractive therefore making you unsuitable in her eyes as a life partner. Plus, your W wasn't going to bash you or divulge too much info to your BIL.
You still need to make many changes but so does she. She might never acknowledge that therefore any piecing the two of you do would not work.
Don't use the D as a "threat" though. Just let her know where you are at and what you plan to do to move forward.