damage immunity is one of the goofiest things

I go with Keith Baker's explanation that a non-magical sword will still cut a werewolf and maybe even cause it pain, but damage immunity means that it gets back up and keeps fighting. Maybe it immediately regenerates, or maybe it just ignores wounds that ought to have killed it. In other words, you can stab the werewolf through the heart and the sword will in fact pierce it and come out the other side, but the werewolf simply won't die (and remains just as capable of killing you as it was before you did that).

This does imply that if you're strong enough to cleave the werewolf in two with one blow, it still dies - it can't reasonably regenerate half its body or keep fighting without legs. But at that point, you're either out of combat (bound werewolf, guillotine) or so much higher level than the werewolf's CR that it really doesn't matter.

Anyway, if I were the DM, I would only make players face a werewolf without magical weapons if either they were meant to be running away or they did something really stupid. I would also allow them to deal damage to it in creative but non-magical ways. Maybe they can lure it into a trap prepared ahead of time or even just cut off its leg, grab that leg before the werewolf can plop it back on, and then play keep-away. (Can you run faster than a werewolf can run on three legs?)