To sit in first class you must have a valid 1st class ticket, the only other way to sit in there is if the Train Manager or Condutor (depending on service) has told you to go in there (normally due to disabelled, problem, etc). If you are caught inside 1st class without a valid ticket you could face a fine of up to £2000.
As for the clause inside terms and conditions, this is during exceptional circumstances at the decision of the Company Concerned, therefore the penalty still applies. Also if you look at the rest of the clause, as long as a full fare paying customers does not require the seat, so you have to wait until the last station is passed before the train ends its journey at least.
If you are really that ill when you travel on a train service, then I would suggest you obtain a certificate from your Doctor or covering letter, call the TOC's help number and arrange a meeting with the local representative of the company (normaly the local Station Manager) and explain the situation and show the letter, if the request is deemed reasonable by the Manager they will pass on there recomendations up the chain and hopefully you will be given an easement on any ticket, provided you follow a set procedure agreed with the company.
If that fails, then I am afraid you will have to ensure you travel more outside of the peak periods on less crowded services.
Sorry I cant help anymore.