First of all, it sounds like you two have the communication part down pretty well. I agree with you about how so many people hide who they are and what they really feel and believe and how detrimental (can't spell, sorry) it is to good relationships.
Second, passion, sexual and romantic, ebbs and flows. Her less enthusiastic responses could very well be an example of that happening.
Next, it doesn't sound like you need to worry about Katie becoming a size queen. I'll remind you that the vagina is an amazing thing...can clamp down on a finger, take a fist, and go back to the finger quite quickly and easily. As a woman, I am constantly amazed at how many men fixate on the penis size thing.
Colorado is awesome. We moved from Northern Colorado to Missouri about 6 years ago. It was the right thing for us at the time but I don't think we will ever stop missing the open minded people back there....However, the cost of living in the West is very different than the Midwest. If you have researched, you likely are already aware of that though.
Keep talking. It sounds like you are on quite an exciting journey.