Mindy, it sounds like you are clear on this point but just in case you're not- what he is doing is WRONG. It IS an affair. It doesn't matter whether he's been physical with her or not, sexting and calling someone sweetcheeks and such as an affair plain and simple. Definitely do not give him a free pass on this. It will more than likely go physical at some point, but even if it never does it is doing tremendous damage to your M. It sounds like he has not "dropped the bomb", is that correct? He hasn't said he's done with the marriage? He just expects everything to continue as-is?
You told him to drop contact with her, that is a "boundary". But you didn't discuss the ramifications if he breached that boundary, and now he has. So what do you do? Well you tell him your boundary again, but this time tell him what will happen if he violates it again. So you need to think about what that is, you kick him out? You leave? You stop all marital activities (dates, doing things together, etc.) until he agrees to MC? Whatever it is you need to decide that and tell him, and be ready to enforce it if and when he violates it again (because he probably will).
Tough love is the only thing that is going to get through to him unfortunately.