Not sure where to take our relationship from here

[CruiseMissile]

Sorry is this isn't in the right place, but I wanted to cover a lot of areas

For a few years now I have been in an awesome relationship with a much older woman, like literally more than twice my age.

I want to clear about something, is that I started the relationship, I was a horny teen and I had the hots for her, and I went after her.  A couple of times she wanted to break it off, and I begged her to take me back, and each time wore her down.  So I don't want people saying she took advantage of me.
It started when I was just a horny teen, and mostly I was just addicted to the sex.  And I guess the comfort.

My mother was never very "nurturing" was pretty much over being a mum when I came along, etc, etc.  So yeah, I think I can admit that there has always been a bit of surrogate-mum about this.  She's a wonderful mum and homemaker, great cook, loves people, and so yeah having her look after my every need has been like heaven.
She has two kids, daughter and son, around 6 & 8 years younger than me.  They figured out what was going on, pretty early on, and I think that them being less freaked out, was what cemented the relationship.  (Their dad was an arse, who cheated and abused, so I think they saw it as their mum getting herself some.)  Once they were ok with it, I moved into her bedroom.

We hang out a lot as a family (a bit less as they're getting older) and NGL the dynamic is a little weird.  For them I'm always the big brother, even when their mum is on my lap, and when we go out in public it seems I'm more like the eldest son.

It all started out with me renting her "garage" to live in (it was close to Uni) and she needed the cash, and we keep it secret so as far as anyone knows I'm still living in the "garage".
We're both religious and go to church, and yeah the fact that we're sinning has always been an issue.
I've been out of Uni and working for almost a year now, and the money has really helped. Eventually me still "living in her garage" was going to become an issue, but we have bigger problems

I'll admit that at first it was just horny sex, then I guess a very comfortable selfish setup.  I know it sounds crap to say that I love them all, but I can't imagine a life without her and her kids.
So whilst I supposed I always thought you know "one day..." about kids, I got comfortable with the idea that maybe that was never going to happen for me. 

Early on I used condoms, and then for a while she used a thermometer, but for some time now had stopped ovulating (according to her cycle/thermometer.)  Which made sense as he's in her mid 40's now.  Except that now she is pregnant.  And already a couple of months along.  Her periods had been getting longer apart and less intense, so she wasn't even sure at first.

So this creates so many problems for us.
For starters, she feels extra guilty and that this is somekind of punishment for our sin. And it's not obvious in public yet, but she is just horrified about the shame it will bring.
She gets a little clingy and weepy at times, and needs comfort, so in some ways this is bringing us closer together.  
And in private she has a little belly, and boobs are more sensitive and stuff, so I find her even more beautiful.  And I can make do with just cuddles.

She is like really worried about the risks to the baby, given her age.  Plus given her obsession with punishment, she's worried the baby will have Downs or something.
We decided to tell her kids, and honestly I was shocked how totally onboard they were.  I think that them being thrilled for her, is the only thing keeping it together for her.

I have been giving this a lot of thought, and I'm just laying out options here, so please don't get all judgey.
And yeah, if you just feel the need to tell me that I'm stupid, and selfish, and immature, I know, so don't bother.

1. I get down on both knees, propose, and insist we get married.  
   I'm too young to get married and I'm too young to be a Dad.  But I can't imagine my life without this incredible women, and fatherhood is happening whether I'm ready or not.  I will go to our Priest, take responsibility, and do whatever I need to do to make this right.  
   I know that she will resist this.  She feels she is too much older, for a permanent relationship, but I can be very persuasive.
    
2. I could go to our priest, confess, and then leave.
   She will be a wonderful mother, and I feel she will get more support if I'm cast as the only guilty party.
   (And when I say confess, I mean lie, say it was once off, and that I pushed myself on her.)  I feel she'll get support if she is seen as a victim.
    
3. She goes "travelling" for 6 months and we see what happens.
   But it's not like there's a cover story.
   And the big risk I see with this, is what do people normally think if a 16yr old girl suddenly turns up with a "baby sister"??
    
4. We change nothing and just weather the storm.
   Thing is I know her, I know that she will feel ashamed, and she will withdraw, stop going to Church and stop seeing her friends.
   And the other thing is, that I will happily move out of her bed, and even her house, to remove the stress and "stain of sin", until we can be married.  But I don't want to leave her alone, and uncomforted, any longer than I have to.

But also NGL, but we could have a great life together.  Most grads like me are still living with their mums, or in share houses, because rents are insane in our city.  With her house, and my income, we could be set for life.  He kids will one inherit the house, but that gives me plenty of time to save and invest.

[ExpatInItaly]

I don't get it. 

You've been together for years now, but still most people think you are just her tenant - is that right? 

I am going to assume that's because of the legal hot water and greater judgement she fears she could face if people found out this relationship started when you were a teenager and she was an adult. Have I got that right?