I love the machine, but in my experience that is not a good price. I believe the MSRP on it is $1499, so you can usually pick it up for less or at the least get some goodies thrown in. My dealer gave me Customizer (software) as well as a starter package of threads and a full assortment of stabilizers, plus a class on how to use it all. As far as the CD hard drive, I'm not even sure what that is. The 350E has a flash drive which comes with it for transferring designs from your computer to the machine, so unless you don't own a computer you wouldn't need the CD drive.
The machine is great; it stitches beautifully and I've never had a problem with mine. I did purchase a jumbo hoop which is nice to have. Designs can be pricey but there are also lots available for free on the internet. If you're mainly doing quilt labels and text you'll be okay with the built in designs. I've never had to purchase any others.
As far as block quilting goes, you will be limited by the size of the hoops that come with it, so you may want the jumbo hoop as well. I haven't tried block quilting.
I'm sorry to hear about your dad's passing; I also lost my dad in June. I've treated myself to a few things and I know he would be pleased. I'm sure your dad would be too. My condolences!