I'm sorry things have been so tough for you and your family, OP.
I would suggest supporting your DD to see the repeat year as an opportunity to do her best work, in a better place than she obviously was last year.
It does actually sound like they've accepted her circumstances were difficult and therefore allowed the repeat year - my department does not allow repeat years and would require her to leave if she hasn't met the requirements to progress (unless there are mitigating circumstances).
As pp have said, we can't mark work that's handed in very late as it's unfair to everyone else, particularly when feedback has already been given out so there is a chance that this could be incorporated into late submission.
We also can't allow students to progress to the next year when they haven't met the required learning outcomes, as they are not academically prepared for that next year. This is true even when mitigating circumstances are advised early and everyone is aware, we don't just wave people through to the next year without evidence that they're ready for it. It would be unfair to the student themselves to do this, as one bad year could then destroy their chances of a good degree classification.
Your DD does need to engage with the university throughout, there will have been many deadline reminders and emails from lecturers or tutors that have been ignored for it to get to this point.
The university process will require evidence of your DD difficulties - from her GP, counsellor or similar, rather than just emphasising the information about your DS - while these may be the cause of the problems it's difficult for the university to decide how to mitigate without evidence of the effect it's all having on your DD.