There is never time enough for everything. I'm retired and don't get everything done, still. lol It's a matter of making a list of priorities and learning some time management skills.
I like your idea of having one son play with the baby while you work with the other one. As long as you're all in the same room you can still supervise. An hour each night does not sound realistic, however.
The reason the school wants you working on crafts with kids is to encourage you to spend time with them. YOu might be surprised at the number of parents who spend zero time with their children being playful. I suggest that playing board games and baking qualify for spending time with them just as doing crafts would. Talk with his teacher about it.
Does your husband not spend time with the boys. He can help with homework, tying shoes, reading. These activities should be family activities which would then qualify as spending time with your husband. If he doesn't I suggest you talk with him about how much you need his help. Perhaps some couples counseling would help.
You said he works 8-12 hour days and has a 2 hour commute. Does that mean he's not home in the evening? That's tough. Depending on when he gets home he still may be able to spend some time with the kids. It's as important for them to have some time with him as it is to have time with you. You are their primary caretaker. His time is limited and that's OK as long as he is spending some time with them. I hope he has 2 days off each week.
At 10 months your baby should be able to spend some time awake without being entertained. If you're spending all her waking time doing for and with her it's no wonder you don't have time. You can put her in her high chair in the kitchen while you're cooking. Sing or talk to her while she nibbles on little pieces of food or crackers if she's fussy from hunger. Give her toys to play with on the tray.
I suggest finding a book that teaches time management skills. I suggest a schedule for when you'll do certain tasks will help getting them done more automatic and thus require less thinking giving you more time for other things. Make a daily and weekly calendar with tasks listed at certain times. Like in the old days, laundry on Tues., bills on Wednesday, baking on Mon. for example. Divide up your chores in a manner that makes sense to you.
This isn't easy. You do have to be flexible and willing to let some days be chaotic without beating yourself up for not getting anything done. My mother made a clean floor and clean dishes her priority. No matter what, on most days she accomplished those two tasks. I've found that I feel good about my house if the dishes are done and the floors swept. Never mind the clutter. I can do that another day. I did spend 10-15 minutes every night after my daughter was in bed straightening up which also helped me feel better about my house.
I've also found that I can save time by having more towels and clothes even so that I can go two weeks without doing laundry. I only had 1 child and she was in grade school. My daughter, who has 2 children and a husband, finds that doing a load of laundry every morning helps her keep up with it.
Make tentative plans for what you'll do when and try them out. Make changes as you see what works and doesn't work. Get your husband to help. Perhaps get a Mommy's helper to help with the kids and/or the housework.