“All Are Righteous” - Really?

In this week’s haftara we are comforted by a famous pasuk: "Your nation are all righteous (kulam tzaddikim), forever they will inherit the Land" (Yeshaya 60:21). In what context is the navi making this far-reaching claim? Is this is about the rosy future, is it a condition for the redemption, or is it an unconditional appraisal of the situation? If the latter is correct, then the question is obvious: are we really all righteous people?!
The mishna (end of Sanhedrin) explains this pasuk in regard to the World to Come, citing it as the source for the statement: "All of Israel has a portion in the World to Come." Even if some of the populace does not fully and properly keep the laws of the Torah, after they pay the price for their shortcomings, they will reach the World to Come, on some level, due to Divine Mercy. This is also the way the Rambam (Teshuva 3:5) explains the pasuk.
The gemara (Sanhedrin 98a) cites the pasuk as an indication of a very different idea. Mashiach will come only in a generation that is all virtuous or all liable, with our pasuk providing the support for the former possibility. In other words, if we will be all virtuous, then we will get that which we are awaiting.
The gemara in Pesachim (53b) cites the pasuk in a totally different context, as support for the idea that when there is a halachic disagreement, we say that both sides (even the one we reject) are righteous. (This is an important point in halachic pluralism, as is reiterated in the Biur Halacha, 143).
The midrash (Psikta Zutrata, Bereishit 27) takes the pasuk in a counter-intuitive direction. When Yaakov came disguised as Eisav, Yitzchak smelled his clothes (begadav) and blessed him. The midrash explains that begadav actually refers to bogdav (his traitors), and thus our pasuk says that even the wicked within Israel are considered righteous (and thus deserve blessing). This approach, again, seems to contain a self-contradiction, as the wicked are not righteous. The Zohar says that keeping brit mila, which was always widely done, makes one righteous. Bereishit Rabbati says that all Jews receive this distinction as members of the nation that accepted the Torah at Sinai. Rav Tzaddok Hakohen says that it refers to the idea that all Jews, even if they are lacking in some areas, are righteous in at least some mitzvot. All three of these approaches found a way to reconcile the statement with apparently different facts on the ground, and each explains that righteousness in this context is not as far-reaching as we might expect.
The Noam Elimelech has a very different approach to "kulam tzaddikim." Every individual sins, which makes it difficult for him to be considered perfectly righteous. However, if he is attached to kulam (to the nation as a whole) then he can tap into what is right in the nation, which the pasuk tells us is considered perfectly righteous. Individuals can be lacking; the collective cannot.
Let us always focus on connecting ourselves to the collective in Israel and remember, as the days of mercy and forgiveness approach, that in order to be successful on Yom Kippur, it is crucial to be willing to pray with sinners.