I agree it's possible the boss and wife were getting their stories straight together. Maybe this is why she wanted her phone back suddenly while you were trying to examine it. This might be what she holed up in the bedroom too... so she could privately communicate with him on a game plan.

I also agree that the text messages are pretty bad... However, I actually could picture two people joking about sex. It would start out as a "joke" to say it so casually when both people know it's forbidden. Then over time connections grow and it becomes more acceptable until eventually they would really do it... In other words it would be born as a "joke" to soften the implications of really doing it until both parties were comfortable with actually doing it. Maybe OP found out before it reached that stage if what his wife is saying is true... still an emotional affair though. The guy's wife should be informed as well, no doubt. It's almost another betrayal itself to not reveal it to someone if you know.

I disagree that her reaction to lie means she instantly must not love him though. I'd say that's a pretty predictable reaction. Very few humans react with humility and shame immediately after being caught doing anything even minor, let alone these stakes. Humans and love are not that black and white to draw a conclusion from how she reacted at first and lied or "trickle truthed" since a lot of people will do that until reality sets in. Most people can't face the reckoning.

I also disagree it's inevitable that changes on both your sides won't work. I personally couldn't handle a physical relationship, but no one on reddit really knows you or your wife, so a lot of people frame their suggestions based on their own relationships and past resentments. Anyone on the internet whose opinion says anything must be some way or another ("there is no room for forgiveness" and "nothing will fix it") should be taken with a grain of salt.

Hang in there...