When trying to transfer money to my current account, apple pay is trying to force me to use my defunct bank account...

The card in the wallet app and the bank account details to transfer Apple Cash to and form are separate things. Removing the card from wallet doe snot remove the banking details.

Transfer money in Apple Cash to your bank account or debit card - Apple Support

How to update your bank account information

1. Go to your card info:

• • On iPhone: Open the Wallet app, tap your Apple Cash card, tap the More button, then tap Card Details.
  • On iPad: Open the Settings app, tap Wallet & Apple Pay, then tap your Apple Cash card.

2. Tap Bank Account, then tap the bank account you want to update.

• • To delete your banking information, tap Delete Bank Account Information.
  • Tap again to confirm. After deleting, you can add your bank information again or add different information.
  • To edit your bank information, tap next to your routing number or account number, add your information, then confirm the numbers and tap Next.

When you update your information on one device, it automatically updates on all

of the devices that are signed in with your Apple ID.