I am sorry you struggle with health issues.
As Tinwen said, it sounds like your wife wants casual sex with another person who has a working penis. You've posted on a board for "poly"=many "amory"=loves.
That said, do you still have a sex drive?
Do you and Wife practice outercourse (kissing, cuddling, mutual masturbation, oral sex, breast play, etc.)?
Can you orgasm without getting hard?
Is sex meaningful for the both of you?
Have you tried using toys, such as dildoes, vibrators, or a strap-on harness with a dildo attached? A strap-on would give her that "intercourse" experience.
If sex has been and is a meaningful and bonding part of your relationship, how do you think you would feel watching Wife share that with someone else? Be ready for jealousy, envy, grief, a surreal feeling ("What the heck am I doing??"), and other unpleasant feelings. You might feel aroused and very sad at the same time. It's going to be a roller coaster of emotions for both of you.
I would highly recommend reading as much as you can around the web, and in books, about how to open up a formerly monogamous relationship to ethical non-monogamy (ENM). There are common speedbumps and pitfalls everyone goes through.
Please see our Golden Nuggets section for a beautifully curated and thorough list of the best ENM resources out there. Web articles, books, a podcast, fictional movies, videos, etc. Also there is a list of our own consolidated former threads (going back to 2009) on dozens of topics related to ENM and polyamory.
Many people start with the book
Opening Up.
One big thing to look out for is when Wife finds a person to begin having sex with, and it's going well, she may experience infatuation, or "new relationship energy" (NRE), which can be quite obsessive and intense.
She will have to negotiate her boundaries with this person (or people). She might find a "bull," a guy who is willing and able to fuck her while you watch, or join in to an extent. "Cuckolding" is a fetish for some.
If "feelings aren't allowed," be prepared for them to develop anyway, on her part, or on the guy's part, or both. We can't control catching feelings. We can only control and choose our behaviors. But it can be hard, almost impossible, to rationally choose proper behaviors when we are in NRE, especially as a newbie.
Check out the "poly hell" article for more on this.
COMMON PITFALLS IN OPEN RELATIONSHIPS Many people who are in a primary relationship stumble into an outside relationship either by choice or by chance, and once involved, things can go beautifully or can go terribly awry. Here are some of the most common problems that develop and some ideas for
www.kathylabriola.com
Most formerly mono couples who become successful in their new open configuration do at least a year of research before actually starting to date. If your wife is looking good for 60, and she joins dating sites, she will get flooded with offers. I went on the market, so to speak, after divorcing at 53, and I was shocked at how many messages I used to get. Most guys just wanted casual sex. I am polyamorous, so I wasn't interested, but maybe that's all your wife wants. So she should have her pick. But most men probably want one-on-one sex, so she'll have to weed those out, if you really must be involved, in the room.