IMO, the paragraph you quote is the Omniscient Narrator speaking directly, not a paraphrase of Sir Walter's remarks. There is no way that Sir Walter would use the phrase "half a fool" regarding himself, even if he were just trying to be polite and didn't mean it in the least! ;-)

Also, the ON tells us earlier in the chapter that "He had been remarkably handsome in his youth; and, at fifty-four, was still a very fine man.", and that in fact his good looks were one of the reasons why his wife was attracted to him.