I was your wife in my situation. The relationship timeline and sexual history is very familiar. Even down to giving him 'permission' to seek sex elsewhere if things continued down that path. Her story resonates with me in a big way. I'd be really surprised if there was an OM in your case.
I was so emotionally starved after our baby was born. My X gave all of his emotional currency to his friends, coworkers and video games, and eventually left me and our S2 for OW. He reserved for me only what currency was required to pressure me into sex.
I commend you for taking her seriously. It sounds trite, but the only reason your MR will fail is if one person stops caring about fixing it. In my case, I was the only one pushing for MC, going to IC, trying to fix myself because I believed that I was the only problem.
No matter how hard I tried, it was never going to work because the other person didn't value the marriage enough to save it. Honestly, I think your wife is confused and stressed and upset because she's afraid you will leave her after her admission.
Now that you have more information, you can make an informed decision. If this is the most she can offer in terms of sexual intimacy (right now) then you are allowed to decide it's a deal-breaker for you. It won't be fun to divorce, but it will be honourable and respectful of the time you shared together.
Or, you can try to amp up the romance and fantasy to rekindle her sexual attraction. Ask her what she needs to feels wanted and desired. Make deposits into her emotional intimacy bank without expecting any reward. TAKE CARE OF THE BABY WITHOUT BEING ASKED! Try to anticipate her needs.
There is no downside to trying as long as you can untie your actions from an expected outcome. Give to her because you love her, and you want her to be happy, and it benefits your daughter to have a happy mother. She's telling you she can't pour from an empty cup. Don't poke more holes in it with guilt or pressure.
There are ways you can encourage her to get in touch with herself as a sexual being-- IF she is interested. 'Come As You Are' is a great book about female sexuality. She probably feels a lot of guilt about not being 'normal'. Create opportunities for self-pleasure without the expectation it must lead to sex.
One last thing-- take the bodily function complaints seriously!
