Your horses frog is peeling due to some terrible thrush, way too long heels and contraction. His frogs are withrered and atrophied from being like this chronically. If you take him bare, he will be lame on that frog without boots and padding. Its like a giant sore open wound when it gets that bad and should be treated as such. Keep it clean and dry and medicated. Sometimes wrapping a sore frog with black salve/ickthammol can help reduce soreness after you pull the shoes. Its not good. It will take some recovery time. Bare would be my choice to recover this also.
Also the hole in his sole is indeed shedding false sole. If you take his shoes off and get his bars trimmed to a more appropriate level, it will all slough out over time back to live sole and allow you to lower his heels too.
I hope your farrier isnt using leveraged heeled shoes..I don't know what the proper term is but they are cut at an angle so when the horse steps, it wedges his heels wider...BIG no no. If he is..fire him.