That's an interesting viewpoint, but one I believe may not be correct. This issue here is the use of the word "whole" in the standing order. If this is taken to mean the full contingent of members, then the NALC opinion would be correct. However, the Oxford dictionary includes numerous definitions of the word "member" none of which can, in any sense, be applied to a vacant seat. A member of a council is a human being who has signed an acceptance of office declaration.
Whilst not directly relevant to this discussion, it is interesting to note that Paragraph 45 in Part VI of the Local Government Act 1972, which addresses the issue of multiple disqualifications, states that disqualified members should be disregarded in the determination of the number of members required to form a quorum.
As interest in local councils wanes and membership drops, applying the NALC viewpoint on this matter will result in an increasing number of counicls being unable to perform their statutory functions.