Paul, I don't think it's so odd that she WANTS to sleep with the kids. Mothers love their kids; crave them, even.
I think it's odd that she DOESN'T want to sleep with you. That she wants the relationship to only go mother-to-child with no room in there for the husband-and-wife R.
After all, what will her excuse be when the kids are too old to want to co-sleep? Whom will she sleep with then?
