Two things.
1 - You were not convicted so you can answer "no." That's legal, ethical, and moral.
2 - A landlord can refuse to rent to you for any reason that isn't prohibited by law (fair housing, discrimination, etc). His application might imply that he is only concerned with criminal "convictions" but that wouldn't stop him from favoring somebody who has never been arrested over somebody who has been arrested even if not convicted.
And you're right. "Withheld" and "unfavorable" are very broad and subjective and what count's is what they mean to the landlord.
It's what the landlord says it is.
Again, what that space is for is in the landlord's mind, so there's really no way to answer it.
Here's an idea:
Call up the landlord or property manager and ask if he wants you to put down the details of a misdemeanor for which you weren't prosecuted.
If you don't want to do that you just roll the dice and say "no."

