Emotional affairs can be really devastating for the betrayed partner. The fact that it is built on and sustained by a social or emotional connection as opposed to 'just' gratified lust gives it a special kind of sting.
I think it does matter whether they've had sex or not. If you decide to forgive him and try to rebuild your marriage, I think it'll be easier knowing he has not shared that aspect of relationship with her -you're not going to have to wrestle with your imagined idea of what it was like for him, making love to her, comparing yourself and so on.
If you think you're going to end the relationship, begin to tell a few friends and family straight away. It'll help you stay firm and not succumb if he tries to win you back.
Equally, if you decide to try to move on from the affair and work it out, think hard about who you want knowing about what he's done. Do you want the possibility of your confidence being shared more widely than you intended, and for your husband's affair to be discussed among your friends and family? You might find it supportive, or you might feel really exposed. Once you share, they can't un-know it in years to come -what do you want the story of your marriage to be among the people who know you? But by not sharing, you could end up carrying something that doesn't necessarily stop being painful very quickly, alone.
I'm so sorry you're going through this. Getting over an affair asks so much of the spouse that is doing the 'forgiving'. The 'bar' for your husband's redemption will be set high -is he the kind of person who will be able to sustain being in "I'm sorry I hurt you and I'm really trying to make it up to you"-mode for as long as it takes? All his other annoying traits and habits will still be there, and life with babies and toddlers is hard. When you're both dog-tired and wired, and he comes up short in some way, will you be able to address the thing that's bothering you in isolation without seeing it, and him, through the lens of the betrayal? It's hard being in the doghouse for a long time, however justifiably, with resolution and actual forgiveness tiny dots on the horizon. You will need to be prepared for all the colours of remorse, push-back and resentment and still be willing to keep on meeting each other in the mess of it all and walking through it together.