Go through with your application, by all means. You will need a university degree before you can be a CF Pilot. After high school, you can go the ROTP (Regular Officer Training Plan) route (plenty of info on that on this forum), where the military will sponsor your education whether it is at RMC (Royal Military College) or civilian university. You best discuss your options directly at the CFRC (Canadian Forces Recruiting Centre).
As for your past schooling, I think the reason you had a hick-up is perfectly justifiable, and in fact - the way you dealt with it and got back on your feet shows character. I would stay perfectly honest about all of this in your interview. It shows that you learned from your life experience and took corrective action. Shows maturity and responsibility.
You have every chance to become a Pilot. Once again, go to the CFRC and talk to a recruiter about your next steps, about your vision, etc etc etc. Be careful which surgery type you get, as I believe not all of the procedures are approved by the CF (refer to the FAQ, Pilot Vision Standards: http://www.forces.ca/en/page/faq-101). If you do some searching, you will find info on this forum on how to best prepare for each step of the application process, especially CFAT (Canadian Forces Aptitude Test), interview, and aircrew selection (that's a big one). You should also keep your application competitive by having things (some or all) like good grades (check), sports, physical activities, leadership activities, volunteering, community involvement, and possibly some indication of your interest in aviation. Again, these are just examples, it may not be possible to have them all but they do look good on your resume.
Start at the CFRC. Good luck!