You should be eligible to apply where you have had a lawful residence of 5 years or more and you have been freedom from immigration time restrictions.
A certificate of entitlement does not make to a British citizen. If you want to become British you must be lawfully resident for at least 5 years. You must first apply for British citizenship before you can apply for a passport. A certificate of entitlement is exactly what it says in your passport.
I have had sight of your letter.
A certificate of entitlement does not make you a British citizen but you may already be a British citizen through your father and that is why they are asking for information in relation to your father. The answer I gave was on the basis you have right of abode for 5 years without considering the option through your father. I cannot give advice on whether you are British through your father on Justanswer as you would need to seek legal advice for that query.
Please read my previous answer carefully. You already have an application pending from HM Passport, I suggest you wait for their decision.