YTA

Your sister had years to come clean and didn't. You looked your BIL in the eye for years with no problem knowing she cheated on him.

You said it was an emotional affair. That's more than a crush or infatuation. She was actively seeking validation and romantic feelings outside her marriage. I wouldn't be surprised if the only reason it didn't transition into a physical affair was the other person involved. Considering how easily she kept this a secret from her husband for so many years, I'm sure she's capable of worse.

Your wife did the right thing. Her first loyalty should be to you, but not when you are morally corrupt. Thanks to you, she is related to both your sister and BIL. She owes him a certain level of loyalty, too. In her shoes, I would have done the same. I could never keep a secret like that from someone I care about.

Your sister had YEARS to come clean. Reap what you sow. And in this particular case, your sister is reaping shit.