update
Finally sort everything out...
The email CSRs are robotic and cold, no matter what I said (including offering to pay the rate difference), same response that I used an ineligible rate.
I called diamond desk today-an agent named Sharon was super helpful. She did see the note on "ineligible rate", but told me only priceline and certain travel agents' bulk prepaid purchase are ineligible. All retail bookings through hyatt.com should have no problem. She openned a case for this, reached out to the property management for clarification (and sympathy), and promised to give me an update by the time she took off today.
At 5+ pm, she informed me via email that property management doesn't know why it says "ineligible", and transferred the investigation to front desk manager, who promised to get back in one hour. 640pm, I got a call from her that the property would gladly honor this as an eligible stay, with all the points from the room as well as from my lunch. An email confirmation of our conversation followed shortly after.
Thank you, Sharon!