Just wanted to let you know that you are not alone. There are so many more people in a loving, yet sexless marriage then you can imagine.
I think the first thing for you to do is decide what you would do if this would never change. If for the rest of your life you would not have sex with her, would you stay with her?
If the answer is no, have a talk with her about this. It is not about blackmail, but it is about being honest with her and letting her know what the situation is.
At that moment, she can decide if the marriage is worth enough for her to work on the issue or not.
Another thing I would tell her is that from now on you are not going to "confess" to her when you masturbated or watched porn. You can tell her that you will continue to do it, that it is no secret, but that you do not have to confess anything to her! (Unless it turns her on, and you can use it for foreplay!).
Also, it might be helpful for her to know (which she might not know, given her upbringing) is that the release a person gets from masturbation is completely different then the release that someone gets from engaging in a loving sexual activity with a person they really love or care about.
Masturbation is about release. Mainly physical and only a tiny bit emotional release of sexual feelings and stress that hides in the body.
Sexual activities together are based on sharing, enjoying, loving, expressing, giving and taking.
(I am someone who made the decision that even if things don't change, I will still stay in my marriage. Things are slightly better now, but nowhere near where I would like them to be. However, for me, my marriage and everything around it is worth this one incompatibility. If it is for you, that only you can decide. And I am not going to lie to you. It is difficult, and it is hard, and it hurts a lot of the time....)