1. I have tried to be honest with my kids as much as is appropriate. For me that means acknowledging my sadness and validating theirs. Assuring them constantly that H loves them too (I know there were times they doubted me, but I think that time has passed.) telling them I don't know what's going to happen but that I know it's all important and that I'm doing the best I can.
2. You can't tell your W how they feel. But you can try to give them the tools to be honest. In my house, two things made the difference to my H. The first was, S8 admitted he wanted to talk to a C, and he brought the resources he got to my H as well as me. That seems to have gotten my H thinking. The other was, D11 crossed some of H's boundaries (for once) that perked him up into thinking like a parent again.
You MUST let go of the idea that the kids will guilt your W into coming back. They won't. Maybe they can penetrate the fog enough that she'll start meeting their needs better. That would be a very good thing. And you have to do whatever you can to help them feel secure and loved in their current environment, without blaming anyone for the state of their environment. That's loving.
Yes on everything Maybell said.
The main thing young kids need to know about separation is that they didn't do anything to cause it (because a lot of times they think they did), they can't do anything to fix it (think Parent Trap), and that you both love them very much. I wouldn't tell them anything specific except that mommy and daddy have grown up problems that you are working on, and that you both love them and will be there for them. They will figure the rest out as they get older.
You are never going to convince your W of how the kids feel. It's something she has to figure out on her own. So don't even try to explain it to her. It's really important, however, to encourage your kids to tell mom how they feel. You could practice with them, role-play, pretend to be mom and let them say to you what they want to say to her. Then plan out a time with them that they can talk to her, maybe even pave the way with W, say, "D7 has something she wants to tell you, could you make a few minutes to sit with her today?" Your kids are little, and need some support in this area.
Here's the part where I don't know your sich well enough. Does you W live at home still? Is the issue she's not spending enough time at home, or that she lives somewhere else?