You’re conflating Dad and Father.
For a child as young as yours, it is a distinction that doesn’t need to be made now. Everyone he knows has or understands the concept of a Dad/Daddy because that is what the male parent is called in toddlerhood, even if absent parents. He is getting to an age where he will begin to grasp family set ups so you need to be ahead of the curve and lay the ground accordingly. It is absolutely in his best interests.
I don’t think it is a good idea to tell him ‘you don’t have a daddy’. YOUR take on it is perhaps technically true (ie he has not behaved like a dad) but your son will not understand the nuance of that. He will believe that his Dad/Father does not and never has existed, which is not true.
You need to be seeing things through the lens of a toddler, not your own adult eyes.
Simple and Truthful is key. As PP’s have said, you need to lay the ground now so there is no huge bombshell for him at a later stage when he will struggle to work out his feelings, which is totally avoidable.
It will backfire on you if you are not honest now, he will struggle to trust you if you suddenly reveal that after YEARS, you have actually been lying and he does have a dad/father/male parent.
I think much as it pains you, it is best to use the word Daddy/Dad for now as it is appropriate to his age. Remember, this is about him building a balanced, healthy view of Families as he grows up.
‘We all have a Dad and a Mum; everyone in the whole wide world has a Dad and a Mum somewhere. Some people have tall Dads, hairy Dads, strong Dads, old Dads, young dads. Dads they live with every day and Dads they don’t live with every day. Same with Mums. Your Dad doesn’t live with us so you don’t know him. All families are different, and our family is you and me and granny/grandad/aunty/uncle etc.'
If he knows of other people with varied family set ups, then you can talk about them as well.
It can all be done in an age appropriate way.
The sibling question is probably a follow on from that but that will come naturally as his awareness of other relationships develops. And that again needs to be met with truthful answers suitable for his age.