I'm so sorry to read of your situation. Honestly your faults don't sound that bad. You didn't cheat on your wife. You weren't abusive. You're not an addict or a criminal. You and your wife may have gotten off track but if she was concerned about that she could have asked to pursue couples counseling. It doesn't make sense that she just quits a marriage that could be fixed, especially after you show the willingness to do the work on your side to improve. Surely this must be more about her own inner turmoil or an affair she's having (or is about to have) than about you because you don't sound bad! Sure maybe she got tired from not feeling the emotional connection or having quality time together but those things can be fixed. My husband cheated, lied, abandoned my daughter and I and I still was willing to work on the marriage (and still would under certain circumstances). When two people want to be together they'll find a way even when things go wrong.
It doesn't sound fair to you that your wife wants a divorce but she wants to keep living at home and yet be free to go out and date. If I were you I'd say no to continuing to live together after divorce. The higher you make the stakes of divorce, the less appealing the idea will be. Perhaps when it comes down to actually moving out and being on her own your wife will back off the idea. If you just agree to keep having her live there then she's getting everything she wants at your expense, which just isn't right. And it's really hard to see your wife get dressed up to go out with another man while living at home.
On the other hand, since you and your wife are still living together then let's hope the divorce won't happen too fast. It may be in your best interest to keep living together right up until the divorce takes place. This way your wife will see all your positive changes and realize what she's losing. It seems there's much more hope for you than for someone who's wife already moved out and stopped communicating. Your wife may have all these dreams about how great her life will be when she's divorced and how she doesn't want you anymore, but when you become a new man and when she's faced with the reality of a smaller house being away from the kids half the time she may change her mind.
It seems there is still hope in your situation, but I really believe if you agree to have her continue living there after divorce it'll make the option of divorce much more easy and appealing for your wife than if she has to move out (and really she should move out since she's the one who doesn't want the marriage!). It may be hard when you're desperately trying to save your marriage and don't want to lose your wife to say you two can't keep living together, but making divorce a less attractive option could make a difference when she reaches the point of second-guessing her decision!
