"Ignorance and stupidity are different things though"
True, but at some point willful ignorance (ignoring presented information) is itself stupid/stupidity.
I like your points on the rapid iteration process - very true.
"Ignorance and stupidity are different things though"
My dad like to tell me that ignorance was his problem (he could teach the person new things), but stupidity was their problem. The trick is recognizing the difference and not wasting your time on the later.
The reason why iterative processes and rapid prototyping work better in models that the author is talking about is because it solves the problem of the client needing to use their imagination. When you can present a prototype to them they can use and then provide feedback it benefits all parties. There is no longer a "what if" in the design, it is there and it can be judged. When the client doesn't like it they can point out specifics and there's less speculation throughout the entire process.
No one said design was easy, but bridging the knowledge gap between a designer and client eases the relationship.