My husband is very infatuated with the young girl, but also seems to be pursuing a woman who he was in a relationship with when I met him. This woman is 40, mother of three teens, and someone he always said he could never fall in love with. So...why is he pursuing his older ex-girlfriend when he feels so "in love" with the 19 year-old?
OK, I'll say it:
Maybe to be around the three teens? The guy does sound pretty sick.
As for exposure, ABSOLUTELY you should expose their affair. First of all, why should his nephew be the only one of the four adults affected to NOT know the truth of what's going on, so that he can deal with it as he chooses?
And secondly, what are you going to tell him what he finds out you knew all along, and asks you why didn't you tell him the TRUTH???
Affairs thrive on secrecy. Bust the illicit secrecy, and you suck out 75% of the affair's oxygen right there.