Yes, something very clearly happened, or was going to happen. Having the guy listed as Katie shows premeditation, and deleting everything shows guilt. If she didn't want her husband to see specific texts, she would have just deleted those. But basically wiping the phone and changing the password shows that she is feeling guilty.
This isn't to say anything physically happened, but something mental certainly did. Either way, it's up to the OP how he wants to handle it. I see nothing wrong with reconciling after a mental or physical affair, and I see nothing wrong with filing for divorce. It all depends on what matters to you.