Listen to Sandi, she has some great advice to give.
If you stop GALìng and accept the A then you are giving your H a green light to continue this behaviour.
If you are allowing him to stay over and are being intimate with him, you are accepting his A. Do you have the divorce busting book. I strongly recommend that you do get it. If you can`t live in an open marriage i think you need to tell him so. Stand up for yourself and tell him its disrespectful to you and that you will not accept it.
Continue GAL`ing and have some fun with your friends. Keep him on his toes, keep him guessing. Don`t talk continuously about your relationship with him, but i think one conversation about how your boundaries is good. Set your boundaries and stick to them.
As for the OW`s husband, I dont know if you should tell, it might push your husband and OW closer together. If OW has a pattern of cheating on her H, then there is a reason she isnt divorced. She doesnt want her life to be torn apart. That is a tough one. Hopefully others will give their advice on that issue.
Stay strong, read some of the vets stories and keep being the best you that you can be.