Step 1: Find the equation of the latus rectum.
The equation of the latus rectum of the parabola \( y^2 = 16x \) is \( x = 4 \), and the length of the latus rectum is \( 4 \).
Step 2: Calculate the area.
The area bounded by the parabola and the latus rectum in the first quadrant is given by:
\[
A = \int_0^4 \sqrt{16x} \, dx = \int_0^4 4\sqrt{x} \, dx
\]
Evaluating this integral gives:
\[
A = \frac{64}{3} \, \text{sq. units}
\]
Step 3: Conclusion.
The correct answer is (B) \( \frac{64}{3} \, \text{sq. units} \).