First let me say that I'm not giving any advice. Advice is usually given by people who have experience in the field they are advising on. They give advice on what they would do and what would make themselves feel better. Oscar Wilde said, "Experience is simply the name we give our mistakes". So, mine are simply observations.
I noticed two important phrases you made in your update. One was, "I still love her" and two "my best friend". I can't even imagine your hurt and I understand your need to divorce in order to heal. Divorce doesn't mean that you have to cut her completely out of your life. I have read where several couples divorced and severed the legal aspect of the marriage but continued to cohabit. I believe your wife would understand this and be glad to be given that choice. If I remember, you stated earlier you didn't think you would ever marry again. Cohabitation means everything is your decision without the legal binding. Not a marriage but still being together. I would think doing without something you love and miss because you feel like you have too, is like the adage of "cutting off your nose to spite your face." And speaking of choice, I know that you fell you were second choice for many years. In cohabitation you are either first choice or no choice at all. Something else to think about. Even though it was a very LTA, when the POS was killed she became depressed and needed therapy. When faced with losing you she became suicidal and needs a psychiatrist. Appears her choice changed considerably. If you continued to live with her after the divorce, you are not living with the wife who had the affair. Instead you are living with a woman, whom you have no legal obligation to, because you chose to live with her. If you have sex, you are having sex with a woman you are living with and not sex with a wife who cheated on you. I would think it would be better than spending life alone with nothing but work to fill the void. Plus, I'm pretty sure that with all things considered, she is very much in love with you.
Everyone is always concerned with consequences. What are her consequences. There must be consequences. So here are my observations on her consequences.
1. She has permanently destroyed the life she had and loved.
2. She has lost that total love and respect of her husband and children.
3. She threw away her marriage.
4. She will always be seen as a woman who cheated, lied, and deceived her husband and family. A woman who was selfish and put herself first and above everyone else.
5. She will know and never forget that she will always be viewed as something less than what she should have been.
6.She will know and feel the hurt of knowing that the man she was suppose to love above all others will never forget what she did to him.
7. She will always look at the man who was her husband and wonder what he is thinking.
8. She will forever live with and die with the hurt in her heart of the unspeakable damage she did to the lives of those she loved and who loved her.
9. Her world is forever changed from the good it was to just the existence it has become.
Emotional consequences can be so much more detrimental and longer lasting on a person than
physical ones.
A very good friend of mine once sent me a quote that applies somewhat to my observation.
"Love does not mean you can live with her. Love means you can't live without her."
In this case you can substitute "her" with "him". I think your wife showed a very accurate demonstration of this quote. She had rather be dead than to live without you. She didn't try to kill herself when the POS was killed. In military intelligence we use to call this an "indication".
I do know that people do change even if it takes years for them to wake up and see what they became and what damage they caused. There was once a man who was a captain of a slave ship. He caused untold pain, misery and death to so many people transporting slaves from Africa to the New World. During a storm at sea in 1748, when he thought all was lost, he became a changed man. He became a minister and a avid crusader against slavery. His name was John Newton and he wrote the hymn "Amazing Grace". People can change but the hard part, for us, is accepting that change and accepting back those that have changed.
Make the decisions that are best for you and those you love. Anyone can give advice but it is you that has to live with the decisions you make, not the people who advised you. Your girls are gone so live the life that will make you happy or at least content. Not the life you think you have to live because of the circumstances and situation. I do wish you well.