In many ways I still love my wife and want to be her friend.
I certainly understand -- you two have a lot of shared history together, and there are obviously reasons you were drawn to each other to begin with. But being her "friend", while she is actively cheating on you and lying about it, will NOT win her back, in my experience.
Time to pull waaayyyy back.
Puppy
P.S. Kudos to OM's wife for contacting you and exposing their affair! I wish more people had the guts, and the character, to do that.