You could have said 1, which is fairly neutral. Or should have been better than at least a little.
is indeed a nuanced word with a certain connotation related to the **old** Japanese view about family/business inheritance (see this). However, in ordinary business settings in modern Westernized companies, almost no one cares about one's siblings, and the / distinction you described is not a thing. It does not work as an explanation of an error even if a joke is intended.
In your situation, is strange even if said by a native speaker, but it might have sounded funnier because it was said by a foreigner. It implies you know a difficult word but have some misunderstanding about it.