1) The results of the D talk are not at all confusing -- you finally gave W enough space to start considering what she really wants. It is better if you cann continue to do this without continuing to threaten D, though. Perhaps you can offer to put the question of a D on hold for awhile, but still give yourselves both space to figure out what you want.
2) Your surety about your sexual prowess is probably not well-grounded. Talk to GH about this. Indeed, I remember GH telling me how their SL was the one part of his old M that really did work. Trust me, if your W were happy in the sack with you, well, then, she'd be happy to be in the sack with you. I have posted and posted about male denial on this issue and don't have the energy to do it again, but if you look over GH's old threads, you will probably see most of what I have to say.