Delusional

My wife is more concerned with WHO is right and who is wrong, as opposed to WHAT IS right and what is wrong, she doesn't understand the difference, and continually argues her emotions versus incontrovertible facts, and refuses to acknowledge my emotions, only her own matter to her, after 7yeats, I feel like I'm out of options, we have two wonderful children, but I can't think of any other reason stay with this woman

You can't give up yet. You obviously married her for a reason you just have to focus on the those reasons. If she just doesn't possess those qualities anymore just sit down and talk with her. Take her out to dinner, explain to her how you feel, how she's effecting the relationship, remind her of your children. If she still doesn't get it, talk about your option as to your relationship.