A Hosted App, a Chrome App (successor to Packaged App), and a Chrome Extension are three separate things, distinguished by how their manifest.json file is set up. What this email appears to be saying is that you're not allowed to have a Chrome App (which they call a packaged app) whose only purpose is to launch another app or a web site. They are saying nothing about Hosted Apps, which continue to be allowed, as far as I know. (I have one in the Chrome Web Store myself.)
Is your app truly a Hosted App? Or, is it a (legacy) packaged app or a Chrome App?
Thanks for the sanity check... I had inadvertently uploaded an old packaged app manifest the last time I published