You need to find a new approach in discussing website usability for the user + search engines. Set realistic expectations (as stated above) and do the best you can. I would continue impressing the need for a better website design which includes more content and functionality. Give them some examples. Pull some competitor data, show them other sites. If these are publicly held companies you might be able to find some great information or press releases on how companies are fairing with internet marketing.
Regardless, you can get that website to rank well for specific keywords by building more high quality links than the competition. Ive seen it work numerous times. Without allot of content you simply are not going to be able to target long tail keywords or less competitive keywords.
You can also build a blog for them and drive traffic there.
