I think you are both wrong.
"The lowest energy state still has non-zero energy" does not mean that the temperature cannot be zero. If the system is in the ground state with 100% probability, then the temperature is zero. It doesn't matter what the ground state energy is.
It's true that all molecules in the substance would stand perfectly still at absolute zero [well, they don't have exact positions by the uncertainty principle, but the probability distribution of position would be perfectly stationary]. But so what? Why would that make absolute zero impossible? [see update below]
Nevertheless, there is no process that can get a system all the way to absolute zero in a finite amount of time or a finite number of steps. There's just no way to get that last little bit of energy out. This is one aspect of the third law of thermodynamics, as discussed in some (but not all) thermodynamics textbooks.
-- UPDATE --
It seems likely that I misunderstood. By "stand perfectly still", I guess you meant "have a fixed and definite position, and a fixed and definite velocity equal to 0". If that's what you meant, then "standing perfectly still" is indeed impossible (because of the Heisenberg Uncertainty Principle). But "standing perfectly still" is not expected or required to happen at absolute zero. Again, a harmonic oscillator which is in the ground state with 100% probability is at absolute zero, but does not have fixed and definite position or velocity.