You are correct. Nowadays, "lousy" almost never refers to actual lice. In your sentence, "pretty" is a mostly colloquial American term meaning "rather".
2021年7月11日
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Lousy generally is used to mean bad. You will occasionally encounter the phrase "lousy with sth".
That means there is a lot of something (usually bad), like an infestation.
Ex: "The time I visited, Prague was lousy with drunken tourists."