Hi Tina,
Well I am new to this Diabetes lark (diagnosed T1 in May), but have had to fight with a diagnosis of epilepsy since 2006. I know how scared you can get. You constantly ask yourself "why me?" No easy answer.
From what you have written you have already given yourself a reason to help things; your children. Maybe you expected me to say your health; but your driving force are your kids. I know easy for me to say but if you do care then loose the wt, eat better, lease with your diabetes team to alter your insulin (or even investigate a pump).
It helps to have a goal; just one to start with. I was diagnosed with epilepsy just as I managed to get a place at vet school. My aim was to pass. Yeah the epilepsy was always there and had a fair few rough patches but was determined to finish.
I you were a patient of mine I would recommend swimming (hydrotherapy). You are in a weightless environment yet still use a lot of your muscles. You'll become fitter and not only that but more comfortable. As for eating, carb count. Yeah the odd treat is ok and 1 or 2 highs don't create too much harm. Have you been on a DAFNE course?
There are ways around most problems, you just gotta find it; and I think you've made a start.
D