Wow! I have been in EXACTLY this situation, so perhaps I can offer some advice...
First, kudos to you for wanting to salvage this relationship. You must really love him to take the time to try to understand his side and not immediately reject him. Thank you for being a good person!
As someone who also had his sexual awaking with the family dog, I can recognize what you strongly suspect. I feel like I was "imprinted" on zoo sex and while I find human females sexually attractive, and I'm able to maintain a long term relationship (I'm married with kids!), normal heterosexual relations don't excite me as much as zoosex or fantasies. To clarify: I love sexy women, love making love to my wife, love pleasing her, and I'm happy in my relationship BUT even when making love with her, I often fantasize about animals. This is never going to change.
My wife and I have found ways to make our love life work, but it took me several relationships and a good deal of therapy for me to figure out how to straddle both worlds. For US to figure it out, because even though I had figured out my balancing point before I met my wife, WE still had to figure out what each other needed to be happy. It's an extra layer of complication for our relationship and something not everyone is willing to do the work on. From your description, sounds like your BF is in denial about his sexual priorities. He probably IS using you as a beard, to appear normal in front of his friends and show off his sexy GF to gain legitimacy or allay suspicion. Been there, done that. Its a terrible place for you to be in! You are more than just a prop and deserve someone who passionately wants you.
Relationships often require compromise to make things work. Your proposal to have an open relationship sounds like a solid plan (we did the same) and shows me you are open to finding a solution. Are you willing to let him find an animal partner and fulfill his desires while you fulfill yours? Perhaps you two should dig deep and really discover what EXACTLY turns you on. Perhaps you can be a part of his fantasy and he a part of yours? If not, I'd recommend breaking things off and find someone who can meet your needs. Life is short, and you should enjoy your sexuality (and he his). While this may suck in the short term, I suspect he will thank you in the end and you will live a happier life.
Just my two cents! ?