There is definitely conflict, in the sense of narrative conflict, in My Neighbor Totoro. Sickness (with possible death) counts, whether it's resolved through any action of any characters or not. Finding Totoro and then not being able to find Totoro is more traditional narrative conflict, or seeing the growth of a magical grove of trees, and then having it not be there later counts. Not knowing Totoro and getting to know Totoro also counts. It's an unknown that gradually reveals itself.
Personally, I'm not a big fan of the worldword conflict for a narrative because of this very confusion. I prefer to think of it as tension, or even better dissonance, as in music theory. Something is unsettling (a V7 chord, a person is sick, a character or place can't be found), and then that unsettling thing is either resolved or isn't. The unsettling thing, whether you call it dissonance, tension, or conflict, is what brings interest. It doesn't have to be a fight between two or more characters or ideas, or a massive obstacle that is overcome. It can be two girls getting to know a magical creature and experiencing a new place. There are plenty of moments of tension in My Neighbor Totoro, though. Just look at how the expression on the girls faces change, moment to moment, and you'll see it.