These are just my opinions so I would definately wait until you hear back from a few of the other wise dber's.
First off, from your post you have been trying to give her the space that she needs and it looks like it is working (since she is saying that she loves you). Personally I would stick with whatever it is that is working. Having said this, IMO it does not hurt to say I love you back to her. Just don't go overboard. A simple reply back with an "I love you too" should not do too much damage. What you may want to avoid is going overboard...you know...saying you have changed, asking her to come back, etc. Take it slow buddy but I would say I love you back to her.
In terms of dating...why not try and offer to do something with the kids together and they try and feel her out a bit. Maybe after doing something with the kids you could offer to go for coffee or dinner. I suggest that you prepare and have some talking points handy. Maybe discuss things that SHE is interest in..
In terms of where her head is at...who knows...but take the positives as just that positives.
Whatever you decide to do take it SLOW...this did not break overnight and will not fix itself overnight. MANAGE your emotions.
Good luck and God Bless, Eric
BTY you have adorable kids dude!
"The difficulties of Life are intended to make us BETTER,not bitter". "Fear is a prison, where you are the jailer. FREE YOURSELF!" "Life is usually all about how you handle Plan B." - Jack3Beans
