On the counsiling question, my answer would be, "If THEY feel they need it". I'm assuming, judging by what you wrote, that the kids are old enough to make up their minds on this.
I have NEVER been a big proponent of hiding affair fallout from kids, for a few reasons. For one, kids KNOW when something isn't right around the house. As parents, we don't give them enough credit sometimes for the brains they have.
If you're hiding the affair from them, and they KNOW something is wrong, this can lead to many issues, such as the kids blaming themselves, the kids learning that secrecy is a "good" thing, etc.
If they're old enough to understand, then I feel they should be told. It's better for them to KNOW what's going on, and if you're trying to rebuild, like you guys are, the kids can help in that as well. It could be a great learning experince for ALL of you, and it can teach your kids what a healthy, ADULT relationship can be like.
At the time (over 7 years ago), we told our two daughters, then 16 and 14. As stated above, all 3 kids KNEW something was wrong. We decided to tell the girls, but not give all the information to our 7 year old son, as he wouldn't have understood it anyways. We DID tell him that we were having some issues, that we were working them out, and that it had nothing to do with him.
And now, to bring you a bit of levity into this, let me give you the followup...
Our oldest daughter is VERY shy and quiet. At the time, if you said "sex" anywhere near her, she'd blush and leave the room. So you can only imagine the look on her face when we told her of her mother's affair.
When we finished, we asked both girls if they had any questions, and they both said no.
Later that afternoon, my W was taking the girls shopping. On the way to the store, the older, very shy daughter said, "Mom, I have a question. Who was better?"
My W told me that she almost drove off the road! LOL
She answered her honestly. As I've stated many times before, never, EVER mess with a Frenchman in that department...
Cory