Hi VFR
I've been actively following your very interesting, elegant and personal thread since the beginning, and have been very much hoping for a positive outcome for you.
I think what you've just heard IS a positive outcome, watching and waiting is a 'treatment' of sorts in various types of cancer diagnosis. As you state, the team treating you would not go down this road if they perceived a threat either to your life, or to your long term prognosis.
Your reaction of wanting active treatment is one that I can understand - and have seen before. In your own mind, you are then hitting the disease straight in the face, as opposed to taking a more inactive/passive stand against it.
Sometimes in situations like yours, an active watch is all that is required, the disease doesn't always progress, but stays static. If this is the case, (and I hope it is), the active watch will actually BE your treatment, not a delay in it.
With view to the CAA, I believe that they accept certain forms of tumour watching as passive treatment, and allow the person to keep / regain their medical, on the condition that they are informed should a further treatment situation arise, on which the medical may be suspended. (I think prostate cancer is a case of issue for watch and wait accepted by the CAA).
So, please don't give up on the CAA with regards to the medical. Don't let the situation grind you down, (easy for me to say, I know).
All the very best of luck