I think this puts you in a very difficult place with respect to what to tell your children. Yes the 21 year old needs to know the facts and then they can make their decision as to what type of relationship they want to have with their father as they are accurately informed.
If you give the 16 year old a watered down / sanitised version of the truth because of their age - you will have to decide when you will finally reveal the real truth - will that be when they are 21? Or 18, or 19 etc.
How will you spend the intervening years - will you tell the truth if you get asked a direct question - or will you fudge/minimise/sanitise? What is the risk of them being told by someone else, over hearing something etc. How would that impact your 16, 17, 18 year old. Is the risk worth taking?
What is the risk of the 16 year old turning on you for not telling the truth and allowing them to continue a relationship with someone they might not have if they had all the facts. They might feel really betrayed and very angry with you.
I am not judging what you should do but you will need to think it all the way through.
Don't be angry with the IL - but detach and expect zero support and understanding. Expect them to become "flying monkeys" - running to you with stories of "a crisis", of "severe ill health" that will emerge just to reel you and your children back in. They will be false (IL might not relaise tho).
Remember this man has spent a lifetime leading a secret life, he is used to lying, manipulating, hiding and scheming - that is why it has taken so long for you to find out.