Hi, I'd like to help you with your question.
You are not being overly concerned or jealous, and you do have reason to be concerned.
Your wife's actions are making you uncomfortable. She is crossing a boundary and not listening to your concerns about it. It sounds like she sees her divorced friend as available and may feel it means she can flirt with him. But she is taking even flirting a bit far when she suggests spending the night with him, not just once but twice.
A spouse should never spend the night with someone of the opposite sex, especially against their partners objections. She is aware of how you feel about her actions, yet she continues to seek out her friend and try to be with him.
She is also showing her feelings out in public. Touching her friend, running her fingers through his hair and staying with him even though you and her friend's date were there shows that she is not thinking of how her actions are affecting those around her. And she also does not seem to care what others think.
Tell your wife that she needs to stop this behavior immediately. Let her know that her behavior is causing you to mistrust her and you are hurt by it. You are her husband and should come first in her life. If you are uncomfortable with her behavior, she has an obligation to stop doing it. If she will not, you may want to consider a separation. Sometimes it takes some time apart for the straying spouse to see the damage they are doing.
Also, tell your wife you would like to go to counseling together. If she refuses, go on your own. You need to decide how you want to handle the situation if your wife refuses to stop her behavior. To find a therapist, ask your doctor for a referral. Or you can search on line at http://therapists.psychologytoday.com/rms/. Most of all, realize that your feelings in this situation are exactly what they should be. Your wife needs to stop what she is doing and start working on repairing your marriage.
I hope this has helped you,Kate
My wife has agreed to stop this behavior though she sees nothing wrong with it, but did add that she misses going to bars and socializing and flirting with men and that I'm forcing her to give up 50% of her social life - all this after 15 years of marriage
You are not forcing her to give up anything if you ask her to stop flirting with other men. Her insistence that she is doing nothing wrong and continuing to flirt is hurting you and your marriage. Marriage is based on trust, and without trust, a marriage cannot work. She is affecting your ability to trust her when she flirts with other men. Flirting is a form of cheating. Flirting hurts you and it takes her attention from you and puts it on other men. As your wife, her focus should be on you totally, as your attention is on her. By flirting and acting as she does with her friend, she is saying that you are not important to her. And that can damage and even end a marriage.
It may be that your wife is insecure and feels flirting makes her more attractive and wanted. But her insecurity is not an excuse to hurt you and your marriage. Your wife needs to admit that she has a problem and be willing to work on fixing it. Blaming you instead does not solve the problem and only makes the situation worse.