It sounds like you are in a bit of a pickle, sir. There isn't much you can do about her position on progressing the relationship between you two, besides continue to be frustrated but enjoy what you have. I don't see any reason to break off the friendship as it stands either. If she is happy with what the two of you share then there isn't anything to save her from.
If she is overlooking other potential partners then she just isn't finding what she is looking for in them. I don't see the point in tearing apart your friendship unless one of you doesn't find it functional anymore. It doesn't sound like either of you are feeling that way, so why wreck a good thing?
In an evolving triad with:
VioletLight, 40, Bi Fem.
Katla, 45, (unsure) Fem.
My musical obsessions