A minimal basis set is a set that employs just one function to describe each orbital. For $\ce{H}$ you take into account one orbital ($\mathrm{1s}$), so you use one function, and for $\ce{Li}$ you consider five orbitals ($\mathrm{1s}$, $\mathrm{2s}$, $\mathrm{2p_x}$, $\mathrm{2p_y}$, $\mathrm{2p_z}$) and you use five functions, one for each.
What you described ("the minimal number of orbital/spatial wavefunctions needed for a specific number of electrons") would use a function for each occupied orbital - leaving unoccupied orbitals, even in a partially occupied subshell, out of the picture. This is a very bad idea - shells are a set of degenerate solutions for the hydrogen atom, so reducing the number of functions to describe them will seriously distort the depiction of the atom.
The usual approach is, instead, to always provide functions at least for the entire valence shell of the atom (and its inner shells). So for all 2nd period elements, you would use all 2nd shell orbitals ($\mathrm{2s}$, $\mathrm{2p_x}$, $\mathrm{2p_y}$ and $\mathrm{2p_z}$), even in a minimal basis set, no matter how many electrons actually occupy that shell. What still makes that basis set a minimal one is that you are only using one function for each orbital.
Similarly, a minimal basis set calculation for $\ce{Na}$ would include one function for each orbital in the 1st, 2nd and 3rd shells, and so on.
