Your situation has a few things that I have zero experience with in my situation, so I'm not sure I can be much help other than add a comment every now and then.
It is a little bit of a warning sign to me that your wife has seeming felt very comfortable having a male(s) roommates, even though it was 25 years ago, and even though you were one at one point. In my opinion, and please hear me that this is opinion, but I think early on your wife was taught some things about stability and commitment that may still be with her today. Kind of the "well, if this situation doesn't float my boat, I'll just find another situation" sort of deal. I may be way off on that, but it's something you can consider.
I would just encourage you to offer the most stable environment that you can for her. I honestly don't know if you should go NC or not. I think many on this board would say you should, but it's kind of hard when there are kids involved...so I don't know.
As far as the God thing, I do understand where you say she is probably coming from. It's sort of the "if it were the wrong thing to do, then it wouldn't feel so right". I have learned (and am still learning) in my sitch that it's hard to fight feelings.
The biggest piece of wisdom that I think I can offer you is when you make decisions or consider your options, I'd ask myself this question..."does this decision show stability and commitment to my wife?". If you continually answer that question, I think you've done your best.
