There's no universal things that are 'cheating', and that's something that differs with each couple. Like some couples are cool with being open with sexual activities, others will be cool with talking about sex with others.
Did you tell your wife, or would you, and not expect to have her lose her shit over it? I'll assume she wouldn't be okay with it because, I mean, if you have to ask yourself if it's cheating, it probably is.
As for whether or not it's 'as bad as actually having sex'- could be. For me, if my boyfriend were to have sex with someone else, it'd be the betrayal/complete lack of respect that would hurt the most, versus the actual physical act. So yeah, if you know your wife wouldn't be happy with these sexual conversations with your coworker, it could be just as bad.
It isn't a "bad thing" having friends of the opposite gender, and it isn't cheating, but considering you stated... " Both of you have agreed you can't because you're married " - it shows you both really want more than to be.. "just" friends, so you are both putting yourselves in a vulnerable position.
Sometimes human desires and emotions can become so powerful, they become stronger than your own conscience , and it causes you to become emotionally weak. Therefore , you are more likely to cheat. So if you find it difficult to control your emotions & desires then yes , it isn't a good idea.
No, but you are walking on very thin ice! Just stop talking to her like that now! If you continue you might be way too tempted to take it too far and physically cheat. They say marriage is hard and this is part of it, you have to not ruin your marriage and therefore your life by continuing this. Think about your wife and your family and go back to them, mentally. If there are needs not being met in your marriage talk to your wife or get counseling. But, you are playing with fire right now.
It may not be "as bad" as physically cheating but I would still consider that cheating. You're having inappropriate conversations with another woman for the purpose of turning each other on. That's wrong and I highly doubt your wife would approve.