Firstly are there any grounds for appealing on the basis that I did not receive the PCN ?
Not finding a PCN on the car, then getting an NtO is fairly common. ALthough photos are not a legal requirement, (it is your word against the CEO's), most councils get their CEOs to take a photo of the PCN envelope on your windscreen to show that it was served. Is there such a photo on their website ? The Notice to Owner is only valid if a PCN is served.
What you definitely can submit reps on, is that not having received the PCN, you have been denied the opportunity to pay the discounted amount.
Secondly, is it justifiable to appeal on the grounds that the tyre is not actually touching the dropped footway.
Sorry, but no, you show a photo where the whole car in front of the front wheel is intruding into the dropped section, so the contravention is made out, I'm afraid, It may not look like much, but it's enough.
Please post-up the NtO, all sides. Redact only name and address. If you're nervous you can blank the reg.number, but it's on display every time you go for a tootle in the car !