That's what that line is all about.
Electrum will have to derive the required private key from the master private key to be able to sign a transaction.
Since the master private key is encrypted, you'll have to provide the password to gain access to it.


It works:
I tried it with a test wallet which is not encrypted but has a password: 12345
(BTCRecover referred to it as "WalletElectrumLooseKey")

Here's the command that I've used:
Here's the contents of "test_wallet12345.txt":
Here's the result:

OP PMed me asking to communicate on Telegram. I would reiterate that for the reasons above, you should keep all communication public. If you message random forum users privately there is a high chance of being scammed. Also, I don't use Telegram.

I suggest you download btcrecover and give it a go yourself before enlisting the help of any third parties. The set up guide is fairly easy to follow: https://btcrecover.readthedocs.io/en/latest/INSTALL/

The main question is do you remember anything at all about the password? Length, character set, memorable words, etc? Is it likely to be a variation of some other passwords you use? If you have absolutely no idea what the password is, then you will only be able to brute force it if it was a fairly weak password.

The same way blockexplorers check for balance, just from the addresses or master public key.
Users do not need to paste their seed or private key to check their balance.

Electrum's wallet file is just a long .json human-readable data containing the addresses, transaction history, seed, master keys, some settings and other data.
If the user didn't encrypted the wallet file but set a password as seen here:
https://i.imgur.com/pklZTkS.png
All those data are still accessible by Electrum and still human-readable except the seed and master private key.
Electrum will only ask for password when access to the encrypted data: the master private key or seed are required.

Could you confirm what version of electrum created the wallet file?

If the backup file is all you have, I *may* still be able to help with recovery. 
I was successful with 2 similar cases recently, where the owners also forgot their
password and seed and only had the wallet file left.

See this topic and just let me know if you need more detail (DM if needed):

https://bitcointalk.org/index.php?topic=5439379.msg61769223

Also be careful not to share any sensitive information in a public post.

If you typed a password, the wallet file gets encrypted using that password.

If the file was not encrypted, you should be able to spend your funds without the need of a password.