....but I think that in circumstances where the land is owned by the applicants family for years and where they are planning to build a house that will be used for their own use then the planning officers should be more lenient...
I do understand where you are coming from, it just doesn't work that way in practice.
First of all trying to keep tabs on the development of properties on "family" land would be a huge headache. Families would be able to build the land, agreeing to live in the property for whatever period, then say circumstances mean they "have to" move and seek to sell the property. If the council put in high clawback fees it would be a huge handicap to legitimate cases where a family does "have to" sell.... and if the charges weren't very high you'd have people taking advantage of the system to build a house where planning would not be given and then sell it on for a profit.
Trying to set up special circumstances like this is a nightmare as some cases will always slip through the net and people will feel hard done by while others will slip into the net when they shouldn't.
I do kind-of-ish work in this area (not directly in planning but in a round about way I deal with it often) and I don't think this would problems at all. Putting in special circumstances and other backdoor systems will/would just lead to more problems. To improve the situation what is needed is more clarity with the current system.
Technically, you have a site you should be able to build on (in your opinion at least). If you aren't going to pose a serious eye soar or disturb areas of environmental importance, I would agree that planning should be possible. The only real problem you have is not getting a clear reason for refusal from the authority (or, you did, but when corrected they still refused so obviously the explanation wasn't enough to deal with all the issues).
Something as personal and with as wide implications as planning is never going to gain a 100% civic concensus, so I'm not trying to get you to agree with my thoughts. Just highlighting some of the issues from the other POV to try and help you understand why the decisions may have been made.