Jealousy can drive you insane. The deal is, this woman IS part of his life and always will be. They share the love of a child and a common interest in that child's parents. Big and important family connection.
So what do YOU do as a new comer into this situation. If you aren't willing to walk away from what is otherwise a fine relationship (assuming it is) then I would become friends with this woman yourself. Hang out WITH them. Get to know her. Become friends. This does a lot to lesson jealousy in my experience.
Most likely she'll eventually find a signicant other as well. This will do a lot to ease the issue.
I do think he was out of line to disappear and say "I'm attracted to her" or whatever it was like that that he said--------- does make you wonder. Stupid on his part. But then again, he said that this mother in law wouldn't put up with his beer . . . I have to ask why you will.
Okay, good luck. Don't sell yourself short. You deserve a guy that meets high standards (that he feels he isn't good enough for HER because of), right?
Leave him and give him time to think about all this.
The situation just sounds like it could lead into physical cheating. He's giving you all kinds of "red flags."
OK, he finds this woman attractive, and you think he would not ever act on it. What do you want to do?
I think you'll get as many different answers on this site as there are people who answer. Some will say, if he doesn't plan to cheat, why not just let it roll off your back, and ignore it? Others will say, given that he is so very attracted to her that he will ignore you in group gatherings to spend time with her, possibly you should give him his walking papers and let him pursue it. Some will comment that after a number of years of marriage, you're instead going to be wishing he would go hang around with someone else so you can have peace and quiet. lol
I tend to personally go with whatever will not make me less of a person. I would not want to hang around feeling like a teenager on the schoolground getting mad because my boyfriend finds some other girl hot. I'd rather be in a situation where I feel like a special person, and would be distressed at myself for not acting as mature as I really am. So in your shoes, if it were me (and please ignore this advice if it doesn't fit you) I'd say to him, "I can see you're attracted, and so attracted that you leave me out totally. This suggests we're not being very smart to be engaged at this point. I'm going to move out, and give you some time to decide if you want this lady or not. (Or another lady.) I'll try to move on, too. But if you decide you'd rather have me, call. I might be available." Then I'd go and try to have a great, fun life, doing things I couldn't do when I was with him.