First of all. Kudos to you IMO for handling this the way you are. Testicular Fortitude. Sincerely. But....
You are being played my friend.
First of all, ask yourself...Does she respect me?
THEN ask YOURSELF "Do I want an Open Marriage?" "Will I share my Wife with another Man?"
If you answer these questions with a "No". Then you need to just flat out out make that known to your Wife. Not in a controlling, possessive manner, but in a way that you show her that you accept her decision on what she wants, but that's not what YOU want or will tolerate. DAMN IT. Tell her and ASK for what you want.
Not to be a jerk, but she's obviously done something and if not, she's VERY close. Her snuggling with you is a way to smooth her conscience. Not to mention that she's asking you about dating and then getting pissed off at a highly moral answer.I'm not saying give up, but man in hindsight she's testing your response because of something.
You handled this very well, but there are some serious flags. I'd keep doing what your doing, but I would find out what is the truth and make your decision from there. They will be AWESOME to you while they go through this, best be aware. They will endear themselves more than normal. etc. All I see is red flags.
I would hate to have to see a post down the road where you think your in control and everything is good, but you found out the hard way.
I'm sorry but this is the truth. Trust if you can, but at this point verify. My prayers are with you friend.