As for your children, it is important for them to have a relationship with both sets of grandparents. But you need to set boundaries. Thus, moving to your own home, while having your parents over for Shabbasos or dinners, may be the best solution. If you are able to find good help for your wife at home, you or your children’s nanny can be there to assist your wife physically and emotionally.
If your parents are worried that your children will have to take on too much responsibility, they should research this issue. My research has indicated that children of disabled parents do not suffer by helping to care for their parents. Indeed, it has been suggested that learning about responsibility and caring for others helps to develop good self-esteem because children experience a sense of worth from their role.
I hope that you are able to get through to your parents and show them that your wife can only be an asset to your children. However, you must get your wife psychological help to assist her in dealing with her feelings of inadequacy. If she continuously feels depressed, it may have a negative impact on the children’s emotional wellbeing. Find someone who will build your wife’s self-confidence and self-worth. She needs to learn how to believe in herself again and trust that she can be a good wife and mother.
You sound like an amazing person and a special husband. Hatzlachah in your attempt to find the right help for your wife and family, and may you be zocheh to derive much nachas from your children!