I have to sort of repeat what SoupDragon said: that your wife, as the mother of two young children, might be either (a) physically worn out and/or (b) just feel crappy about her body. As a mom of three children, two of whom were born within one year of each other, I can attest to this. IMO there is nothing that can make a woman feel LESS sexy than trying to lose the post-baby weight, changing diapers and wiping up spilled juice all day, never really getting enough sleep, and feeling like everything you wear is stained with milk or formula! I don't know your wife's particular situation, of course (e.g., whether she's at home with the kids or working a full-time job), so I'm just speculating here. I know that in my own situation as a wife I, too, got so self-conscious in front of my husband that I started changing clothes in the bathroom with the door shut!

Also as SoupDragon mentioned, postpartum depression could be playing a role.

You sound like a caring husband. I wish you the best.