For John, the ideal would have been to have a son of his, but I think that since Nicole has not been able to give him the son he wanted, he sees in MC the closest thing to having one of his own, since he is a young man who is entering adulthood and believes that can mold him enough as he would have wanted to do with his own son.
Clearly, but now that MC is no longer just a naive boy that can be easily molded in John's image, instead quickly becoming a competitor or rival to John himself, what then does John want? He tips his hand to the knowledge of the affair with the dress and dinner, although MC is too dumb to realize it, yet his behavior towards MC the following day in the office and at lunch is neither threatening or even disapproving, and he makes no efforts to try to keep MC away from Nicole. The other logical course would be to fire MC, but again his words and actions show that he wants to KEEP MC in the company, and even continue his upward momentum therein. So what is the current end goal? Give Nicole and MC enough rope to hang themselves and be caught red-handed? Unlikely, as Nicole has no assets to give to John in a divorce (quite the opposite), and he seems to genuinely care about Chloe, and regardless of MC's relationship with her, MC's affair with her mother becoming a public spectacle would ruin her.
However, another possibility would be that John has known for a long time about the affair between MC and his wife
I don't see the evidence corroborating that. John is utterly shocked and dismissive when Silvia first suggests the coincidence of the pair not being available, and while he may have had some whispers in his head from then until Little Big Pond, he paid them no heed until the trip. Only then has he been acting in ways to "innocently" confront Nicole and MC on the affair, for the gleeful pleasure of watching them both squirm under their respective covers.
and he consents to it, hoping that Nicole will become pregnant with MC's child, who would carry the surname of John in order to continue the family name (something that I assume is very important for someone who has researched their own ancestors for many years), since John seems unaware of the existence of Mrs. Blues' son.
Hmm, I've never thought about that, and actually it surprisingly makes sense. Blues' son would be publicly known as illegitimate, however a boy born from Nicole would be naturally assumed to be John's son, especially if he could time it right so that he would have sex with Nicole "close enough" to her conceiving by the MC's seed. If Nicole wished to keep her affair a secret, then she will willingly uphold the claim that her baby boy is John's, thus motivating John to not expose the couple, but he can't help himself from torturing them in the process. My thought-process with John wanting to remove his competitor was to protect his company/legacy, but if John does want MC to provide him with a legal male heir to the Heavens' name, then elevating MC to take over the company once John retires/dies makes since as MC would be motivated to keep the company running for the boy, whom the MC knows to be his own true son, once he becomes an adult. Furthermore, John built his empire through ruthlessness and cunning, thus he is now putting MC's "feet to the fire" concerning the affair to train/test that ruthlessness and cunning in the MC, to not only take over, but to in turn train the next "Mr. Heavens" in John's methods, as John cannot guarantee he will be alive long enough to train the heir himself. In the first business deal MC witnessed, John revealed that he sets it up so that he wins regardless of his target's actions, thus his offering Silvia was not only to see MC squirm concerning staying loyal to Nicole/Chloe, but also wanting to train him to take the prize, as John would.
For credence to this possibility, there have been several refences to Nicole not being on birth control, along with opportunities to ignore her warnings/protests regarding said issue. Also, before the hiatus, Orb posted a patron still of John, and (I believe) MC in the Heavens' bathroom with Nicole hunched over the towel bowel with the camera looking into her concerned/embarrassed face, strongly inferring morning sickness and thus the men learning that she's pregnant. Now since this was just a patron post, it's canonicity is unknown.
Inversely, I don't recall if there's a point where the game forces the MC to cum inside Nicole, thus someone might have a playthrough where it was impossible to knock her up.
If there isn't some kind of challenge, John's libido doesn't seem to work; so the fact of knowing that his wife has resumed sex thanks to MC would pose the challenge of winning back his own wife, whom he has despised on so many previous occasions.
John's libido has never been lacking. He knows that while Nicole may not be discerning or intelligent (as he's been able to hide all his affairs) she's not brainless, and thus knows "men have needs" and therefore would begin to ask why he no longer has sex with her. He therefore claims to be impotent, and the first time we players see this claim is WHILE he is having an erection while watching Silvia struggle to keep silent with a vibrating dildo up her vagina. His "miraculous" erection at the end of Ch 11 isn't natural, it's certainly Viagra, again with the purpose of watching Nicole squirm over the affair, and possibly to time their sex close enough to an MC-Nicole conception to breed uncertainty in the couple as to who the father is, and provide John grounds to convince Nicole to keep the baby rather than aborting it out of fear her husband would discover the affair via a pregnancy he did not consumate.