Karen, I wish my wife and yours could speak. I feel so blessed that my wife hates intercourse, and she is quickly accepting that my lack of erections doesn't mean anything bad about her. I'm still eager to please her in all the ways that she really likes. For her, she said it's kind of like the honeymoon she never had. Our introduction to penetrative sex was pretty rough and now we're kind of starting new and she's actually enjoying it.
Now, there is one major difference between her and your wife. When I came out to her, she turned the tables on me a bit and confessed to me that she has always felt attracted to women and had been hiding it her whole life. So, I am guessing that plays at least some part in her ease in accepting my true sexuality.
If your wife doesn't particularly enjoy intercourse or erections, then I think there is hope. I would recommend not wearing anything feminine during sex. Seeing you as you currently are is going to help her. Let transition take its course and don't rush her into it. My wife is NOT comfortable yet with me dressing feminine, and it's something I have to accept. Transitioning or just increasing level of femininity is something both of you have to experience together and it can be hard to make compromises for the sake of your wife. But keep in mind that she is making many adjustments for your sake.
Do you have a therapist that you are seeing? If not, I would recommend seeking one that specializes in gender identity issues.
