Tim,
This is where the rubber meets the road, PM style, in my opinion. It is very easy to self soothe when you really BELIEVE what the other person is saying. (ie, the allergies) But when you half suspect that they are pulling a fast one on ya, then it becomes a whole different ballgame. This is where the hard stuff begins.

If I were you I would explain to her that you felt that the cuddling was indeed taking on a sexual nature and that you were sorry that she missed your intentions. And in the future, you will be more forthcoming about what your desires are....and THEN ask her what you could have done to make your intentions clearer. Does she like whispering in her ear while you are caressing her, etc. HOW would she like you to initiate at that point, is what you need to find out.

IOW, you waiting for her to take a bath every single time has to go. I hope that you can communicate this to her in the most loving fashion that you can conjure. I'm sure all this scares her but I know that you love her enough to force the issue and help her take a look at what has to change in the relational dynamics.

Being RECEPTIVE to me is still a hard one for my H. He is quite enthusiastic if it is his idea but not so much if I am the one who starts things.

Anyway, I just wanted to say that I agree with Mojo. I think that your wife DID know where you were headed, or at least suspected it, and played dumb afterwards.
However, that is not the end of the world. Hold onto yourself and have the conversation that you really want to have with her. She may be telling you the truth in that she needs a very obvious form of initiation or she misses it. My H is like that. I find it hard to believe, given that a common refrain from the LD wives is to knock off the pressure.

Anyway, keep us posted! Sounds like things are really going well for you. A couple weeks ago, I don't know that you would have even been sexually cuddling with her for hours on end. That is progress, indeed!

Honey