With regard to the tooth decay you can take a swab and clean out all the pooled breastmilk after she has nursed to sleep, and you can also get these wipes call "Spiffies" which have xylitol to help prevent decay.
I would highly advise against withholding on the nursing as this can cause unnecessary distress to both of you which you will just have to deal with later on anyway. "The No Cry Sleep Solution" by Elizabeth Pantley sounds like the book you need.
If you can pump and let your hubby feed her with a bottle sometimes, it might help with the burnout factor. If you let her fall asleep nursing and just swab afterwards, it sounds like you might all get more sleep and peace and quiet. My son also needed to nurse to sleep all the time but he eventually outgrew it as he neared two. Admittedly, I haven't read much of Pantley's book but if I had to do it over again, I would definitely read the book. I think you're supposed to introduce other soothing techniques at the same time as nursing and gradually try to transition him to other ways of falling asleep? Anyway, like I said, I've only perused it briefly..
P.S. It is not true that breastfed babies don't get tooth decay. My son had caps put on his 4 front teeth at barely one years of age, and I know of many others in the same boat. Apparently there is a cavity causing virus that not all adults carry that can be passed down to your child from shared utensils, food, mouth kisses, etc. Breastmilk by itself is good for teeth but if there is ANY sugar in the mouth (including from foods with simple carbs) then it is much WORSE than sugar alone. Also, I had a tendency to leak breastmilk and when I tested it out I found out that tons of the milk was pooling in his mouth when he fell asleep at the breast. The vast majority of breastfed babies will never encounter this, but some will so just be careful.