Re: hugs, kisses, sex while separated. I am totally in support of keeping the sexual connection going. My belief is that sex is the glue that holds a marriage together. Funny how often a meeting of the bodies can lead to a meeting of the minds. In my case, I waged the battle of the bedroom for my husband and beat out the other contender. Others say they feel used, that it is better to make the spouse miss the niceties of the relationship.
However, in a relationship where the other partner has felt alone and neglected, further neglect is not only not beneficial, it is a detriment. It is not that hard for an attractive woman to find someone who will hold her, kiss her and make her feel good. If her husband won't do it, there are usually willing men at the nearest bar.
It's a little late to mention it, but you want to avoid making your confidante someone who will be talking to her confidante. Despite the fact that she was telling the wife her side of the story, she will resent you telling the husband your side. Next time, try to find someone else for your support system.
Also, I think it is a bad idea to hold the abortion over her. There are a lot of emotional changes that a woman goes through when a pregnancy starts and when it ends. She has been going through that, and likely it is part of her emotional instability and turmoil. She did what she thought was the best choice at the time. It would have been nice if she had involved you more in the decision, but as you acknowledge, you may not have been the father of the fetus. You have an unhappy wife and a child to deal with. Whatever her reasons were, she was not willing to bring another child into the marriage under the current conditions. The fact that she is that unhappy should be your focus, not the action which is a symptom of that underlying problem.
And, as you so eloquently said in your talk, it is the future that matters, you two should not beat each other up with the past. You don't want to be criticized for being an absent parent, and she doesn't want to be criticized for having had an abortion. No one can change the past. There comes a time when you have to accept what happened and move on. Or get divorced, because if you cannot accept the past, there is no good future.