Page 183 says this about resolving all spells:
This Opposing dice pool is further modified by any positive cover modifier the target might benefit from (see Defender/Target has Partial Cover or Good Cover, p. 160).
Following the trail along to page 160 to see the rules for benefiting from cover modifiers, you read this:
If more than 50 percent of the defender’s form is obscured by intervening terrain or cover, he gains a +4 dice pool modifier to his Defense roll against any attack.
This says that cover modifiers are only useful during an Attack/Defense opposed roll situation.
This is all well and good. Go down to how to resolve combat spells:
Direct Combat Spells:
Handle these as an Opposed Test. The caster’s Spellcasting + Magic is resisted by the target’s Body (for physical spells) or Willpower (for mana spells), plus Counterspelling (if available). This Opposed Test is done in place of the standard Damage Resistance test. The caster needs at least one net hit for the spell to take effect.
Direct combat spells have no Attack/Defend Opposed roll. You merely resist damage, with a threshold. Unlike normal combat rolls where there is an Attack/DEfend phase and then a damage phase, direct spells are ONLY damage phase.
Go back the second quote from the book in this post. During direct combat spells you can't get a modifier to a defense roll that doesn't exist, or a negative attack roll that doesn't exist. You aren't making an attack roll! It says 'any cover modifiers the target might benefit from'. In this situation, they wouldn't normally benefit from ANY cover modifiers!
Use an indirect spell and there is an Attack/Defend opposed roll, the target would benefit from a cover modifier normally and so cover modifiers exist to the spellcasting roll.
And yes, that's a house ruling on establishing LOS. There are no separate rules for establishing LOS, it only mentions that visibility penalties can apply to it. That is my take on what that statement means!
EDIT: Beyond the RAW stating that it works this way, it also makes fundamental sense.
Why does only seeing half your body shield you from my magic if your armor does not? It's not absorbing any of the power going into your body, no more than your armor is (which it isn't).
However, a chest-high wall CAN take the brunt of a fireball, so you take less damage. It's actually reducing the power of the effect, via reducing the spellcasting pool.