[Edited to engage directly with "Please help me to complete Case II"]
You write, "I assume that $y=\inf A=$ least element." The difficulty with this has been noted in the comments, but since it is still in the body of the question, I want to address it:
The infimum of a set is not the same thing as the least element of a set. The infimum of the set $P$ of positive reals, for example, is zero, but the least element of $P$ is ... well, it isn't, it doesn't exist; $P$ has no least element.
What is true is that if a set (of reals) has both a least element and an infimum then they are equal.
Now, $A$ is defined to be a subset of the rationals. It follows that if $A$ has a least element, then that least element is rational, so we are just trying to prove that $A$ has no least element.
Now in Case II, you are assuming $y$ is not in $A$. If by $y$ you mean $\inf A$, then you are assuming $\inf A$ is not in $A$, which is the same as saying that $A$ has no least element, and we're done. If by $y$ you mean the least element of $A$, then Case II doesn't exist, since it makes no sense to ask what happens if the least element of $A$ isn't an element of $A$. So, no matter what you mean by $y$, there is nothing needing doing in order to complete Case II.
[Previous version of answer:]
You have already shown that if $y$ is any element of $A$ then there is a smaller element of $A$ (namely, $y-k$). This proves there is no smallest element of $A$.