Unfortunately I cannot state with any certainty the definition of 'charter aircraft'.
I do however believe the meaning is simply 'an aircraft engaged in a charter operation'.
Yes, unless an aircraft has an approved MEL, it is subject to the conditions outlined in 20.18 and cannot be used for charter unless ALL instruments, exluding passenger convenience items, are working. That's exactly how it reads.
I think this is another example of the industry outgrowing the regulations. What once was sufficient and appropriate, is now ambiguous and risking becoming irrelevant.