The move that works for me is to concede the point completely and immediately, because the student is right and pretending otherwise is what makes the rest sound evasive.
"You are correct. No household has 1.5 children. The mean is not a prediction about any household, and it does not have to be a value anything can take."
Then give them the reason it is still worth computing: it is the number that reproduces the total. 1.5 children per household across 200 households means 300 children. That is a real, physical, countable quantity, and the mean is the per-household rate that recovers it. It answers "how many schools do we need", not "how many children does the family next door have".
Once they see the mean as a rate rather than a portrait of a typical household, the objection dissolves — because rates routinely take values no individual takes.