Noted, however if we move the courtyard to the second floor and towards the exterior of the building envelope, then we might be talking apples to apples, or maybe we are talking about coconuts.

Agreed, an example/plan would greatly help clear up the discussion and give us something tangible to analyze. Table 503 also explicitly notes that area limitations are to be determined by the definition of "Area, building," per story. Now we are back to discussing an area not circumscribed (surrounded) by exterior walls and with no floor or roof above, which shall not be included in the building area. Defining Height, story, furthers my misunderstanding in that this court can not be described by the definition provided. If it is not to be defined by the building area, or by height story (504 reiterates this, even accounting for penthouses, which are also given an occupancy, and further detailed in 504.3 as not for habitation), then all I am left to understand is that it is only defined by an occupancy group for Structural and MOE purposes. Thusly, thoust is confuddled! Have a great weekend.