There's gotta be a switch connected to that latch! I would call the BMW dealer.
If anyone out there has a car with folding rear seats, try this: fold the rear seat down on one side. Get into the back seat and while looking into the trunk from the rear seat, click the "open trunk" button on your key (or under the dash). Did the light come on? If so, then the switch is definitely in the latch, as the trunk isn't even open yet. If not, then have someone lift the trunk lid as you're looking though the seat passage and spot exactly when it comes on.
Just a silly thought.
2002 BMW 325i