+1 on Oakleaf's advice to consult a PT regarding safe cycling form for your particular history.

I'm not a PT, but I don't think you need a lot of arch to protect your lower back as described in the article you quote. There are different degrees of arch, and different degrees of upright. Different frame geometries will encourage different positions. I think even sitting upright you can engage your core to protect your lower back. It may be that you need to test ride some different types of bikes to figure out what is comfortable for you.

Here's a pannier with backpack straps, as an alternative to putting your backpack inside a pannier basket.