As you have had xrays taken that showed up severe deterioration, this is osteoarthritis. Rheumatoid arthritis would have shown up on blood tests.
Both types of arthritis have the same symptoms, but rheumatoid is an autoimmune disorder and can affect internal organs.
It appears that you have degenerative changes going on in your body with you already having back problems. This may be a separate issue, but it can also be as a result of you not walking correctly to compensate for the pain in your knee.
Go back to see your doctor to refer you for physiotherapy.
I am having the same problem with my knee but I have moderate degeneration at this time. I was told by physiotherapy to apply ice packs to the knee to reduce the inflammation.
Also to raise the leg with a pillow under your foot.
You can take pain relief as directed on the packet, or your doctor can prescribe much stronger pain relief for you. Your doctor may also prescribe a stronger anti-inflammatory than the one you can purchase from the pharmacy. But be careful with them as they do not suit everyone. I have had to stop taking Ibuprofen because it made my leg swell a lot.
The physiotherapist has also recommended Amytriptyline for me to take, this is an antidepressant that is commonly used for leg pains.
You may also find it helpful to use a walking stick and a physiotherapist will tell you the correct size for you and how you should use a stick correctly.
As the knee has severe degeneration and you have lost a lot of weight, go back to your doctor as you may now be offered a knee replacement operation.
Unfortunately, once the bones and cartilage start to deteriorate, there is no cure only replacement by surgery if appropriate and by pain management and changing your lifestyle so as not to make the condition and pain any worse.
Your dentist may give you some advice and help with regard to your jaw problem.
I agree with jemma. Though you've lost the weight, the damage to your knees is already done. Carrying less weight certainly helps, though - congratulations on losing it!
Definitely go back to your doctor. Physical therapy exercises will help. There may be some less-invasive procedures they can do (and probably will be required to do) to postpone major knee surgery.
For what it's worth, my father in law had both knees replaced and is doing great! The key to success is to be diligent about physical therapy and to remain active. Even when his knees were at their worst before surgery, he was able to ride his bicycle, so going into his replacement surgery he was in the best possible physical condition he could manage.