Your doctors aren't in denial. Yeast usually doesn't affect men, but sometimes they can get a rash on the penis, but it's almost never serious. Yeast isn't dangerous at all, and is very common in women; most women get a yeast infections sometime in their life, and some women normally carry yeasts in the vagina--it's normal. So don't worry much about it. Your partner does not need to take the diflucan or anything else, unless he has a rash on the penis due to yeast--in which case there are creams that are better than diflucan for that purpose.
The home remedies won't do anything. Acidophilus is totally ineffective, and tea tree oil may be irritating and make symptoms worse (and may prevent healing of your yeast infection). Stop using them.
The story of "bumps" or "pimples" on the penis make me more worried about genital herpes and genital warts. But if the doctor was certain he had yeast, that's probably correct.
Bottom line: the yeast infections may be a problem for you, but even there, it's an inconvenience, not a serious health problem. And probably not a problem for your partner. Don't worry about the condoms.
Good luck-- HHH, MD