It is tough to decide which approach is right for you. In my reading of HNHN, a H is encouraged to try his best to meet his WAWs needs for up to two years before going dark. For W, they are told to only attempt to meet the WAHs need for two WEEKS. Why the huge disparity? Because they are of the opinion that 1. It's not good for a woman's health to deal with the stress that long, and 2. WAHs aren't as easily swayed by having their "needs" met. WAWs can be fought for more easily by their Hs, while WAHs tend to be more stubborn.
What you are doing right now is a "best of both worlds" approach, but that is (we're told) doomed to failure. Your husband had one affair. You took him back, but did not recover your M properly. Your H then goes and has a SECOND affair. In my opinion (I'm no licensed counselor - just a guy, like Starsky, that recovered his marriage from a steep dive!) you must not treat this second A like two highschool sweethearts in a spat. He has devastated you and your children. By letting him kiss you, touch you, and complain to you, I don't think you are setting concrete boundaries as Starsky outlines. You are instead, unwittingly and tacitly, telling him that it's ok to have an A, you'll still be there to kiss and touch and text to even as he decides to dump you out of his life.
What can you do? I have heard of others putting an intermediary in place to handle the kids schedules so that you wouldn't have to have contact. That doesn't have to be anyone formal- it can be a relative or friend. Without contact, you hope that the A is hastened to its end, and that your H returns hat in hand. There are no guarantees. Statistics that I have read state that it is less likely for a WAH to return to the M than a WAW. Seems that once men have made up their minds they are less likely to return....
I think your H is still in the fog. He doesn't see this woman's faults- only her promise. With you, on the other hand, he sees plenty of faults. It's the contrast effect- the LBS rarely looks good to the WAW. Get yourself out of that "contrast" entirely! Let him ONLY have this woman to complain to. Let's see how she handles his daily b*tching about work. Maybe she'll make the mistake at rolling her eyes at his hundredth complaint and that sets off an arguement between them?
Waywards can't tolerate an A partner that isn't perfect. They didn't blow their lives up for someone with faults. That's why it hits them SO HARD when the A partner suddenly shatters the fantasy. Their whole world operates on the premise that the OP has no faults, and will meet every last one of their needs perfectly. You are trying to spped your H to the realization that this OW is FAAAAR from perfect. The problem is, you are the very last person he will listen to on this matter. He must discover it by himself.
The other problem (though you may have better self control) is that if you are in his life, feeling this pain long enough, you may say or do something hurtful that will guarantee he never returns. By stepping away now, you only leave him with a good memory of you, not the angry, hurt, spitefully woman you *may* become.
Sorry for the long winded 2x4! I'd like to see your M recover- not crash and burn!