I have long maintained that "BS-hood" alone is no guarantee that someone will not be unfaithful. Your story illustrates just that. Even as BSs we are vulnerable to wayward thinking, bad boundaries, blameshifting and justification.
First and foremost, there's nothing more than a really great friendship happening between me and this man. I struggle with even labeling it as an EA because it's not "I love you, you love me, let's make really inappropriate decisions together."
Sorry--you are taking emotional time, effort and energy out of the marriage and giving it to someone else. It is an EA. You are using the "feel-good" of this interaction to bolster yourself.
What I realized from this relationship is that there is so much missing from my marriage (which I knew) that is actually possible to have with another human being - which I didn't realize.
Beware this line of thinking--it is seriously flawed. You don't live with this person, interact with them daily or have to pick up his socks off the floor and smell the bathroom after he's used it. EVERYONE can be wonderful and kind and loving and giving a couple of hours a day. Comparing your EA partner to your spouse is very dangerous territory.
You cannot make a rational decision about your marriage until the OP is out of the picture and you are maintaining NC for some time. You freely admit that while your WS has done a tremendous work on himself, the two of you haven't worked on the marriage. So expecting the marital problems to be resolved is unrealistic. You have to work to resolve problems, not just work on yourselves. And seriously--your IC is okay with this friendship?
Your marriage may or may not be over. You may or may not be compatible. But I will say that you haven't worked on your marriage to see if it can be made better. You have both hidden behind IC (and you with your EA) to avoid addressing things in the marriage.
My advice? NC with this person, tell his wife, and get into MC. You have to address the ugly. All of it. Yours, his and what you own jointly. Will it work? Who knows? But I do know that, as someone who is divorced, I have a clear conscience. I did all I could. My ex? He did very little, including being actively in affairs (and lying about them) while in MC. I sure wouldn't want that on my soul.
I do think most marriages, particularly long-term ones, can be saved with hard work and dedication. And if it doesn't work, some MC will help with the coming apart in a way that will minimize the damage done to everyone, especially the children.