This is a juvenile explanation at best given the complex situation in the South regarding politics, the structure of the confederacy, the economic output and population of the South, their manufacturing capabilities, rail networks, foreign trade relations, and the political situation in the North, but since no one replied I thought I'd do my best to answer your question. I'd prefer true experts to chime in, but I hope this brief summary will prove satisfactory.

Even before the Civil War the North grossly outnumbered the south in terms of total industrial output, trade, available resources, and total population. They could field larger armies, manufacture more weapons and supplies for these armies, and then replace both when they were lost, doing it all over again. Turtling up would have allowed the North time to marshall their superior resources and present them with the initiative to overwhelm the South. With the South's comparatively shallower pool of resources and manpower to draw from, a handful of devastating victories by the North earlier in the war could have changed the entire dynamic of the conflict and ended it much sooner. The South had to prove that waging war and forcing unification was futile and uneconomical.

A defensive strategy by the south would have forced the Confederacy to fight a war of logistics which they would inevitably (and did) lose. The North was also going to attempt to blockade the South's ports to cripple their economy. The South was also a new nation and had no allies it could call upon. Lee understood all this before the war even began, which is why he opted for an offensive strategy and the idea of a short war. The South's resources weren't depleted, they had armies full of young men eager to fight, and experienced officers and commanders to lead them into battle. Decisively defeat the Northern Army enough times and eventually support for the war would collapse, and every victory would validate the South's chances in the eyes of European powers like Britain who they hoped would offer them assistance in the war to protect their textile interests. A quick war would avoid the effects of the Blockade as well.

But victory eluded the South. The defeat at Gettysburg was arguably the war's turning point, where Lee's army of Virginia could no longer logistically sustain offensive actions against the armies of the North, the Union gained confidence in their forces, and the manpower shortages and logistical situation in the confederacy ensured that the South's defeat was all but inevitable. The maritime blockade slowly strangled the Southern economy while the armies of the North grew in strength and size, pressing in on all sides. Unconvinced by the South's performance, importing cotton from their colonies, and diplomatically appeased by the United States, Britain chose to not intervene on behalf of the South.

The war became defensive, and a crippled South was eventually overrun.

The Civil War was not a "total war" until November of 1864. In November of 1864, Lincoln was re-elected in a close contest that he himself expected to lose up until at least August of 1864. His opponents would have likely sought a negotiated peace with the Confederacy. Lincoln was determined to end the war only with a fully preserved Union, and the prospect of another four years of determined war ensured that the secessionists would eventually be overrun.

Up until that November, however, the movements of the armies carried great political weight beyond their simple military significance. "War is an extension of politics," it is said, and from 1861-1864 the maxim held true. The Confederate armies needed to prove the viability of their young nation through territorial defense, battlefield victory, and force protection.

The various invasions were all attempts to win politically significant victories on Northern soil. They were not attempts to conquer the North. The point was to demonstrate to the Northern public that there was no end in sight--that a negotiated peace was the only realistic way to prevent an interminable torrent of blood.

After 4 years of improbable success, the Confederacy and its armies very nearly succeeded in proving this point to the Northern people. As late as August of 1864, Lincoln was convinced that he would lose re-election to an opponent who "will have secured his election on such ground that he cannot possibly save [the Union] afterwards,” i.e. by promising to seek a treaty with the South.

The reverses suffered on the fields of Antietam, Gettysburg, and Perryville, in addition to defeats in minor invasions in the Trans-Mississippi and in southern Ohio, still to some extent demonstrated the continued potency of the South. While the Confederacy was surely seeking more stirring success in all of these gambits, it is much more helpful to view them as military-political actions rather than through a strict bodies-and-bullets calculus.

As for your questions about the chain of command, first remember that from 1862-1865 Lee was in command of only one Southern army, the Army of Northern Virginia, and did not have much tactical input for any of the other dozen or so Confederate armies operating in the same timespan. That said, he did have to go through a chain of approval for the Antietam and Gettysburg campaigns, in which his plans were reviewed by Jefferson Davis and the cabinet. However, Lee's nigh-impeccable track record and close relationship with Davis meant that his plans were favorably viewed and quickly approved without much question.

I believe it was Gary Gallagher or was it McPherson who argued that Southern society necessitated an 'offensive-defensive' approach. Lee and others knew that the South could win simply by not losing so they adopted an overall defensive strategy (meaning that it was not a major goal to conquer the North, but to maintain the political and structural integrity of the South). However, Southern pride necessitated offensive action for continued public support and to prop up morale.

(edit: I didn't mean this to be the entire reason but only one aspect. I feel others have covered most everything else but I didn't see this mentioned)