Oh Shivaya, I think we are leading parallel lives. My XAH has been behaving in similar ways. I have 2 kids and I am honest with them. They know something is not right with Dad. They know he lets them down frequently, puts his needs before theirs, and also lies.
I feel that they need to know I will be honest and will validate their perceptions. We talk about alcoholism and the emotional/spiritual effects. I tell them their Dad truly loves them and bring up loving actions from years ago, and then explain his sickness is in the way right now. I always tell them his behavior has NOTHING to do with them..they didn't cause it, can't cure it(no matter what they do), and we can't control Dad. I often share other ideas I learned in Alanon and from my counselor with them. They have both been in counseling as well.
As for me, I am so disappointed by how he treats our precious children. It saddens me to my core and this often pops out of me as rage toward him. I pray that my HP will take this from me. My counselor and I spend time on this too.
I'm sorry for what you are going through.