Daughter had medical withdrawal from college. Was there >5 mo but no credits. Univ didn't check 1098-T box 8 (at least halftime). Should I answer NO to FT student Q?

You said she was there (in school) more than 5 months, that counts as full time.  Answer that question yes, in the info section. 

Q. I think without full-time status none of this counts anyhow?

A. No.  Even though the school didn't check the half time+ box, you can still answer yes to the follow up question, in the educational back section.  That  qualifies her education for the tax credit.  She did not need to complete the term and/or earn credits. 

What the 5 months controls is whether you can claim her as a dependent, under the qualifying child rules or have to use the tougher qualifying relative rules. 

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Return/INF12139.html