Disclaimer: am a paediatrician! But have some previous experience in elderly care and some family experience with dementia and delirium.
This sounds like hypoactive delirium and unfortunately many elderly people do not recover. I like to use the term "brain failure" as a way of conceptualising that a vital organ (the brain) has been pushed into a failure state that may persist even beyond the acute illness, and may be irreversible or not totally reversible. In much the same way that those who are elderly or otherwise in a vulnerable health state can easily tip into other vital organ failure eg heart or kidney, which may also be permanent or even fatal.
There may be a component of cognitive decline / dementia prior to this episode which has been concealed if his daily routines have remained simple and unchanged (and therefore unchallenging) to this point.
So sorry this is happening to your Dad. I agree an honest conversation with the hospital team is needed to move forwards. For example, what is being achieved with the IV fluids? Perhaps they are keeping him hydrated whilst he awaits a discharge destination where it is hoped his delirium will improve and he will drink again? The hospital is generally a very demanding environment for an ailing brain and so his delirium is more likely to get better somewhere else. Staying in hospital to have the IV fluids therefore wouldn't be likely to achieve anything for your father, if you see what I mean?
If this was my Dad I would be very sad as I would be thinking - this is very likely the end of his independent life. I would want to get him out of hospital as quickly as possible but into a situation that is safe and in which he is adequately cared for. I would be weighing up the benefits of home with package of care Vs nursing home (or perhaps other options you could discuss?). A nursing home has the benefit of meeting a very high level of care needs and being the best solution should things stay as bad as they are. Carers at home obviously a return to the familiar environment which would be best if things improve substantially. However, if it doesn't work out he may have to move again to a NH eventually which would be another significant adjustment that could deepen the delirium. I don't think there is any way to predict whether / how much his brain will recover to get him back to something like his previous self.
If he does not return to eating and drinking within a reasonable timeframe then I would view this as a terminal sequence of events and would not want IV fluids / tube feeding to artificially extend the dying process - if it was my Dad. But hopefully that isn't what is happening here and he may make some recovery yet and you'll have some glimpses of your old Dad soon.
Really sorry this is such a horrible place to be. In my family it was my Gran.