Disable categories that have no products

How about if nopCommerce made it so a Category would not be displayed if the products listed under that category have been sold out?

this could be tied to a configurable option to display the amount of product varients which are allocated to that category

when its 0 the category would not display (but also configurable - because you might want the category to display if for example there is information on the category page that you want to be available, also if someone browses your store and you don't have a category for a product they are looking for then they may not come back to your store

That is a good idea.  Have a configurable field for each category where you can specify the action to take when products reach a supply count of 0.

Example Actions for categories when product supply reaches 0 could be:
Unpublish
Do Nothing