Hard to believe..

Right, for a supposedly grounded drama, it requires giant suspension of belief.

1. The first one, as you said, is hiring illiterate to work in the office and apparently keeping the job.
2. The second one is the court not finding it out.
3. These two do not act and interact like real humans. Ok, Michael didn't want to tell the court about her illiteracy and she allowed shame to lead her into the most miserable life for xx years (no survival instincts in this one, huh?), but still... Michael has YEARS to think about everything. If Hanna lied that she signed the papers, was he sure that everything else she had admitted was true? And then, when finally making the contact, he just kept sending her tapes without any single word of his own? And she sent 1-sentence letters? I mean WTF? It's just completely implausible. And then he stopped writing to put her (and himself) through worst torture possible? And then when they finally saw each other... such strained emotions.

And then, as others have noted, he knew that other women lied and certainly deserved to spend more time in jail.

How does he manage to be a pretty successful lawyer? Each day, he would be reminded of Hanna and the case both privately and professionally. It would have eaten him alive.

And after all this, we as viewers are expected to believe he will achieve catharsis by admitting to people the whole story? No way. It would haunt him for the rest of his life. And she really made sure of that by killing herself on the day she was supposed to get out of jail.

Hanna didn't have mental disability. She was stoic and calm most of the time. She cried less than the male lead in the film. She never used her learning difficulty as an excuse because people would only see it as an excuse and not an explanation. I don't think the SS would care about the condition of all their guards.