Well, if you are married, you must file as married filing separately or married filing jointly. You can't file as single. If your spouse and child are US residents (pass the substantial presence test, even if they are not "legal") then you can file jointly and include your child as a dependent. You would apply for the ITIN as part of the tax return. (Your child gets a reduced dependent credit if they don't have a valid SSN, but you can still list them as dependents.) Joint filing usually results in lower taxes than married filing separately or filing as single, assuming your spouse does not have taxable income.
Also, you can't cover someone on your insurance unless they are your spouse or tax dependent, so that may have raised a red flag, if you filed as single with no dependents.
I don't exactly what triggered the letter for schedule 1 and 2, whether it was this issue or something else, but you definitely need to file an amended return as married with your dependent and apply for the ITINs. You may want to consult with a tax professional. If not, we can lead you through the steps necessary.
