Those countries aren't good democracies because of the thresholds, they are good democracies despite the thresholds.
Exactly. Their having thresholds doesn't make them completely anti-democratic/autocratic or disqualify them from being good democracies, no?
If one wants a party to win more than 1 seat's worth of votes to get into the city council, why should a ward councillor get a seat when potentially winning even fewer votes?
Because it works differently.
In wards, the wards' inhabitants vote directly for a candidate, not directly for a party, the candidate with the most votes wins and gets the seat, regardless of how many he/she gets.
On council level, you vote for a party, i.e. everyone in the muni votes here. Naturally, if there's an election in a muni like JHB with say a turnout of 45%, you can't justify a party that gets 0.25% to get a seat on a council that represents 5.6 million people. If a party can at least get 1%, then they have a tangible constituency to point to (albeit small).
Your argument makes no sense here. Why can't the ward councillor from a ward with 1,000 people, for example, be elected because a party would need 1% of the total vote from a muni as big as e.g. JHB?
Although, you could probably deploy thresholds on ward elections too... (But I think that idea is stupid)