Welcome to HCM and thanks for your query.
Small testis with varicocele
needs surgical procedure to correct VARICOCELE.
This will prevent further damage to the testis.
If the other testis is normal, there should at-least more than half the chance of fathering.
Your doctor has diagnosed right and given appropriate advice, unfortunate though.
This is not the end of the world and one testis is good enough to father.