Hairball, I think you may be confusing honesty with the sort of brutality that your wife engages in, all in the name of laying your cards on the table.
Being honest means telling her the truth about your feelings. You can do it in a hateful way, but that is just more enmeshment, isn't it. Being honest while being loving is realllllllly hard but so darn worth it. It is difficult to tell when your wife is really wanting to talk, to discuss and work towards marital happiness and when she merely wants to get her own way. (ie, have your sexual desire available to pump up her flagging self esteem, but not actually be required to DO anything about said attention) Given that, why don't you ask her? "What is your intention of saying this? Do you want to talk about how we can work together to solve our issues?" This communicates, once again, that this is a couple's issue and not Something That Hairy is Fcuking Up Yet Again.
Also, I can see that you are confused and rightfully so. Your new radical honesty policy will allow you to fight past your non-confrontational self and ask the following of her: "Wife, you say that you need me to initiate in a confident, assertive way. Yet you have also told me, repeatedly, that men's sexual urges disgust and frighten you. I am completely unsure how to proceed. There is quite simply no way for me to be confident in your presence, given our history of repeated rejection. I can work towards confidence, but it is not something that you just switch on and off at will. Would you like to work towards a mutually satisfying sex life?"
IOW, you have a tendency to take on *everything* within this marriage. She makes these small statements, knowing that you will percolate on it long enough that you will eventually convince yourself that she's 100% right and what are you thinking, anyway. She knows this and capitalizes on it, over and over.
Recognize this in yourself and simply throw it back in her court before you have a chance to talk yourself out of what you know to be true.
