It's a little bit difficult to see from information you have provided what is referencing that DLL. Maybe having your whole wixproj would be easier.
However, check all your projects, most likely one of the projects has a reference to Microsoft.Deployment.WindowsInstaller.dll. In my case i had a reference:
<Reference Include="Microsoft.Deployment.WindowsInstaller, Version=3.0.0.0, Culture=neutral, PublicKeyToken=ce35f76fcda82bad, processorArchitecture=MSIL">
<HintPath>$(WIX)bin\Microsoft.Deployment.WindowsInstaller.dll</HintPath>
</Reference>
In this case change the property $(WIX) to your path. Preferably create a Property with the path like you did with <WixToolPath>
for example <WixSDKPath>E:\where\cplusplus\thirdparty\windows\wix\WiX Toolset v3.7\SDK\</WixSDKPath>
then in HintPath use that property:
<HintPath>$(WixSDKPath)\Microsoft.Deployment.WindowsInstaller.dll</HintPath>
Also you forgot to add <WixTargetsPath>