What does “FileVault: No (Encrypted at rest)” mean

Due to the limitations, you might want to use an encrypted disk image rather than whole disk encryption.

Come to think of it - why not use both?

You could always turn off FileVault if you felt it too much a hassle, but to get around the limitation you caught (thank goodness you did catch it), consider using Disk Utility to make secure the parts of your data you need to force into a locked state when that disk image is unmounted. This will let you sleep your mac and not compromise that data by allowing it to be re-mounted without the appropriate passcode being supplied.

I'm afraid there are not many options given an ordinary, "home user" budget.

Theoretically you could send the drive in to a recovery service such as IBAS to get them to recover the original data on the drive. If this is even remotely possible depends on what kind of physical medium you had (i.e. is it SSD or spinning-platter hard drive). If they can recover everything, you can use the standard Apple tools to access the encrypted drive with your password or recovery key.

If you can't recover the full data set, you would have to inspect the data manually and probably create new tools for decrypting blocks of data using your recovery key. This will require specialized knowledge and skills, considerable amount of time - and with no guarantee of success. It is out of range for ordinary, home user purposes. FileVault 2 uses AES-XTS encryption - if you haven't got the recovery key and/or volume master key it is going to very hard (next to impossible) to decrypt.