You don't know me and I don't know you, but I'm going to tell you what I would tell my dearest, closest friend if he came to me with this issue.
Telling your wife you have romantic and sexual feelings for her sister has the potential to DESTROY YOUR LIFE, HER LIFE, and HER SISTER'S. If you have children, the damage is geometrically increased. Don't do it. It would likely be a train-wreck of monumental, earth-shattering proportions.
I can certainly see how you might be attracted to your sister-in-law. She comes from the same gene pool as your wife, and thus likely shares at least some of the same qualities you find/found attractive in your wife. Especially if you and your wife have grown apart. HOWEVER, the relationship between sisters is a complicated mix of love and hate, compassion and competition. Even the most self-aware, enlightened women I know would struggle titanically to get a handle on this one, and from what you write your wife isn't anywhere near ready to wrap her head around it.
If you find that you just cannot get past this issue on your own, take a trusted friend (preferably one with limited contact with your wife) into your confidence and ask for help working through it. If you need to, get professional help (counselor, psychologist, etc.)
But if you open this can of worms with your wife, be prepared to discover it is really a thermonuclear bomb as it explodes in your face and dissolves your flesh.
Continue to explore and pursue a path toward polyamory if your heart and head lead you to do so. But don't set off this bomb.