Ouch, SC, this doesn't really do a lot for your sense of security, does it?
Clearly her flirting is more than a bit of banter, and it does pose a real danger to your marriage.
You don't need to be a genius to suspect that she's got some serious self-worth issues around her attractiveness/desirability and I'm wondering if these episodes tend to follow one of your big rows? Possibly the rows undermine her feelings of security with you, so she - not very sensibly - goes off to find reassurance, of a sort, elsewhere.
If your story is pretty much as you've told it, you two would do brilliantly in counselling. I reckon you can fix it for good, quite straightforwardly
Get on the phone to Relate! (After agreeing with your wife of course.)
Good luck,
AG