Step 1: Write the coordinates of the latus rectum.
For the ellipse
\[
\frac{x^2}{16}+\frac{y^2}{b^2}=1,
\]
we have
\[
a=4.
\]
The endpoints of the right latus rectum are
\[
\left(ae,\pm\frac{b^2}{a}\right).
\]
Hence the angle subtended at the centre is
\[
2\tan^{-1}\left(\frac{b^2}{a^2e}\right).
\]
Step 2: Use the given angle.
Given,
\[
2\tan^{-1}\left(\frac{b^2}{16e}\right)
=\frac{\pi}{3}.
\]
Therefore,
\[
\tan\frac{\pi}{6}
=
\frac{b^2}{16e},
\]
i.e.,
\[
\frac1{\sqrt3}
=
\frac{b^2}{16e}.
\]
Hence,
\[
b^2=\frac{16e}{\sqrt3}.
\]
Step 3: Use the relation between \(b\) and \(e\).
Since
\[
e=\sqrt{1-\frac{b^2}{16}},
\]
substituting into the above equation and solving,
\[
3b^4+16b^2-256=0.
\]
The positive solution is
\[
b^2
=
\frac83(\sqrt{13}-1).
\]
Therefore,
\[
\boxed{\frac83(\sqrt{13}-1)}.
\]
Thus,
\[
\boxed{(C)}
\]
is the correct answer.