Feeling sorry for you because thid must be upsetting. Let me say from from a spiritual standpoint: Everything gets dull even a boyfriend or girlfriend and nobody is perfect except the Lord there is always some positive aspect in another that your current partner doesn't have. So there is a natural to fantasize.

On the other hand when her love deepens for you she should feel attracted and sexually excited because of the man you are to her. What is experiencing now with these fantasies is just an animalistic lust.

You have to talk to her about the chat you have stumbled upon. Tell her you don't have a problem with fantasizing but would like to see it otherwise. In that regard you can try to do more nice things together and surprize her now and again.

Furthermore you have to be absolutely you will never tolerate cheating like Katie is suggesting and if that happens it's definitely over. And that she has to cut out bad association like Katie from her life. If she is willing to do that you will also know she cares for you. Good luck