I suggest diving a little deeper into the zoning regulations and finding if there's a section that specifically addresses home-based businesses. Start by looking for a section that addresses "accessory uses". Read what it says and think about how you can tailor your operation to stay within the regulations.
Most municipalities recognize that some citizens are going to run cottage businesses out of their homes no matter what the local government does, and that trying to shut them all down not only makes voters mad, it also effectively cheats the city out of tax revenue by giving the operators an incentive to keep their activities off the books.
Consequently, many cities allow such businesses as long as certain rules are followed, which generally focus on the potential public nuisance aspects of a business, such as brightly lit exterior signage.
Read the regs, and if there looks like there may be an opening, try talking to the municipal staff again. It's often a matter of asking the right questions. Think about it this way:
"I live at 123 Tulip Lane and I want to open a gun store in my house." - BAD
"I live at 123 Tulip Lane and I want to open an accessory minor retail business per Section 7, Subsection C of the Zoning Code. Per the regulations, there will be no added off-street parking, no exterior signage, and no operations between 8pm and 8am." - GOOD