I watched it. From behind, at about 1:19, the blonde chick still looks as I remember. They were big here though, as a singles band. That song not being one of their hits. And they never were considered a disco act, although pop. Disco died as all fads do, but it was much bigger than most. Bigger than punk, but not as long-lasting. If you can call things that happened in the hardcore blip a few years after "punk."
As for Disco being played live, I have to say that KC and The Sunshine Band were a pretty solid live act. One could argue they were more funk than pre-packaged disco. Chic was a great live act as well. And while we're at it, Donna Summer was no slouch at singing live. That chick could deliver the goods.
I cheered on the Comisky Park explosion as much as anyone, but have largely shed any disco bashing. Compared to frauds like Justin Timberlake or the grandaddy of pedophiliac weirdness, Jacko (who admittedly can sing live), modern pop makes Disco look good.