Neville's parents/What makes a muggle?

[esmith222002]

No: HPFGUIDX 79905

I just wanted to discuss something my wife noticed from the PS. This 
concerns Neville and his 'Wizard discovery' speech. Neville refers to 
the fact that his family thought he was all muggle up until this 
point.
POINT 1 - Neville's parents are supposedly Alice and Frank 
Longbottom. Therefore, if Neville was non-magical, surely he would be 
described as a squib (ie non magic person with two magical parents)
POINT 2 - In OOTP, Alice is described as looking incredibly like 
Neville. (Which brings me round to my second point. What is a muggle? 
If you have one magic parent and one non magic parent and you are non-
magic, are you a muggle?) 

Therefore, IS FRANK LONGBOTTOM NEVILLE'S DAD?? (otherwise why would 
his family think he was a muggle?)

This could be a FLINT, but it is a lengthy piece of dialogue, and it 
seems that JKR could simply have said Neville's family thought he was 
non-magical rather than muggle!!