I feel from your update that your h even though messaged her infrequently, messaged her to make amends which as funnily enough she said, this shouldn't be his priority. If she text him he should of said could you give me space I'm sorry for all of this but I have to sort my relationship out. Instead he gave her a full description of the events between you and him (she should have been the last person he said this too) and wanted her advice. This is totally inappropriate.
I think the issue of bringing her into your lives is more problematic than the physical side of their affair. I think from what you have said they both have used this time to cultivate an emotional affair. Giving themselves affectionate names, offering support and advice, going beyond the boundaries of a genuine friendship. When he said to you he needed her in his life, even the risk of you finding out wasn't a deterrent to this. Not to mention his bizarre intense response to her wedding.
I'm so sorry I want you both to work out. But I just can't see how you can move past that emotional attachment he has, the fact he's brought her and her family into your life. And I do think she has an element of blame, she certainly isn't the victim she is making herself out to be. She knew all their history and she knew her 'platonic' friendship over stepped the mark- she should never ever have stuck around. So why did she? Because she needed that emotional affair as much as your h did. You mentioned in an earlier post her husband can be insensitive to her needs- well your husband filled that void.
My husband when I first met him had what felt like a harem of women around him. I knew it wasn't right but early on I put it down to he's more of a woman's man than a man's man. Then his history unraveled. His ex was emotionally abusive, they had children together- he stuck around because he wanted his family together (they were separated) but he needed that emotion (more than anything physical) so he had three women who he could rely on. Their trips out had all the trappings of dates, they had affectionate nicknames, he was like a knight in shining if they ever had a problem. It was fine when he was single but not when he was dating me. The final straw came when a grandma of one of the women directly asked him when I was there why he wasn't dating her grand daughter.
That was it I told him he had to sort his life out, go to counselling to sort out the massive issues from his previous relationship and if he wanted to date me, he had to get his affairs in order literally. He didn't seek counselling but he did find a friend (who also happened to be his ex- but she was a true friend there was no stupid pretend dates going on). We both helped him overcome his issues and he cut out the emotional affairs. This was all in the first year of our relationship. But we are so strong now.
My scenario is not the same as yours, but what does mirror yours is the emotional affair. We overcame them, I don't know how it could ever work with her in the picture. Remember although it seems like she's been around a life time it's only been in your married life- you had I life before that- so it's possible to live without her in it. She should respect boundaries so you can both work on what you have got left. Though I think it's a case of literally walking away from your old life and creating a new one- almost like a migration. From anything linked to her. You might have a chance is you move to Australia!
Thinking of you x