data validation lists that are determined by a previous data validation list selection

1) I need there to be a data validation drop down list under each of the headings on sheet 1 based on the information in sheet 2. There are lots of spaces in between some of the entries in sheet 2 as you can see for the different utilities especially. I need the entries to show up in the drop downs without the spaces, as it looks unprofessional to have spaces in there.
2) I need the drop downs to be dependent upon each other. I.E. the MEASURES drop down needs to list only the measures that are under the selected MEASURE SUB TYPE, the MEASURE SUB TYPE needs to list only the sub types that are under the selected MEASURE TYPE, and so on....
EX: If utility A is selected from the UTILITY drop down, system types A and B should show up in the drop down of SYSTEM TYPE.
Then if system type A is chosen from the drop down, sub-system types A,B, and C should show up in the drop down of SUB-SYSTEM TYPE.
Then if sub-system type A is chosen, measure types A and B should show up in the drop down of MEASURE TYPE.
Then if measure type B is chosen, measure sub types D and E should show up in the drop down of MEASURE SUB-TYPE.
Then if measure sub-type E is chosen, measures EDRT, EEE, EGU, EAS, EWQ, and EQET should show up in the drop down of MEASURES.

Both of these dilemmas are in the spreadsheet as well, so if you open that it should have all the info you need to solve it.

All of this data can be found in the attached excel 2013 spreadsheet. My apologies for the vague information and data in the sheets. I can't provide much more, due to my workplace wanting me to keep things in house, especially since I am in product development. The spreadsheet is similar to how my actual sheet works, so if someone can show me how to fix these two problems in this sheet, I will be able to do it in my own.

Thanks in advance for any help or recommendations.

Pepe Le Mokko, that doesn't solve dilemma #1 though. I see how that can solve the second one, but the other issue is that I need to be able to update the spreadsheet and have it automatically update the dropdown lists without having blank cells in there with it.