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1) The DMV is likely to give you some type of restricted license, what is generally referred to as an "occupational license" or "hardship license". Usually this is first approved through the court but I can't tell from your facts if the judge approved it or not. If your lawyer didn't tell you to get the info from your father's doctors then they should have. You may even want to hire another lawyer, look for one that does criminal law, to look over your paperwork and the court's orders and the docket sheet to see if anything is missing. Most judges are willing to approve a hardship license with very specific restrictions on it. You can expect to be limited to only certain hours and to be allowed to drive only on certain tasks.
As to a critical need, the letters from your father's doctors should take care of that or, worst case, your lawyer can do a deposition of the doctors which is questioning under oath and use that to prove the need. If you are at the stage where the court can approve it then it is likely the local lawyer will know what your specific judge requires and how tough, or lenient, they are.
2) This question is kind of rhetorical but basically the DMV can do it because you got two DWIs and didn't finish the requirements placed on you by the court. The courts have long held that a drivers license is a privilege, not a right, and they can choose not to give you a license if you don't jump through all of their hoops.
It sounds like the lawyer may not have been that skilled. You definitely want the record to contain all of the medical info but the most important thing to do is to get the correct medical info showing why it is necessary for you to drive him.