Why is the CNO cycle essential for life in the Universe?

the CNO cycle is just an alternative to the PP chain for fusing hydrogen into helium. it isn't essential, although it is rather common. maybe you're thinking of the triple alpha process, which is the bottleneck for producing stable elements heavier than helium. a universe with just hydrogen and helium in it would be pretty uninteresting chemically: the only stable molecule would be diatomic hydrogen.