N. 2 is the way to go, no doubt.
Your most important goal has to be to create a solid system free from all the problems a players guild has.
Story related names are very important to do that becouse of the confusion they could create if left to players guilds.
Needless to say, when ppl choosed those names for their guilds they already knew they were taking a story name, they can't complain now.
Also every good rplayer will welcome those changes even if they mean that he needs to change his guild name.
Solo