Jay, were there any signs or clues over the last 20 years that W was gay? If not, then there’s a good chance she’s not truly gay and won’t be sticking with women for the rest of her life. Just trying something new and out of character, not unlike all the faithful spouses who suddenly are caught up in an affair(s).
I too suspect MLC. Everything adds up. Age, childhood issues, recently lost a parent, new attention to exercise and clothes… Read up on MLC, you’re in for a ride. It’s about her and her issues more than it is about you. I know it’s really difficult, but you have to figure out how to NOT take her rejection of you personally. She’s doing all this crap FOR her, not To you.
Do not move out. Allow her to be the one to leave if she wants to. I think you are on track with the “sister or flat mate” plan. I've done this for 2 and a half years so far. You can do it too. It DOES get easier.
Set boundaries. Don’t be afraid to tell her that you feel certain activities in your marital bed (or whatever) are disrespectful, and you won’t tolerate it. Do this early rather than later and you will earn her respect.
M: A really long time. Crisis: 5 years. She's still worth it.
Life is never made unbearable by circumstances, but only by lack of meaning and purpose. -Viktor Frankl