Dear Utterly Confused,
It's HER Problem
I have known this kind of woman before. They are attracted to the wrong man sexually and the right man emotionally. There's nothing you can do. She's got the problem with priorities. She's got a weird idea about who's sexually attractive.
Share Your True Feelings
Have you ever shared your true feelings with her? If she understands your love and then still rejects you physically, then move on...definitely.
Real Love from Friends
There will be lots of other women, particularly as you get older, who will appreciate your ability to be a good friend, and reward your love with real love. Given that you place a priority on real love as opposed to just superficial sexual attraction, I suggest you look for women who share the same views on relationships that you do.
I think good friends make the best real lovers...