Anywho, I think we're forgetting a third in the middle option. "Reboot" by way of unacknowledgement. Before hard reboots became a thing, I would argue that the Bond series went through multiple reboots, and yes, I'm talking pre Casino Royale. The films would change drastically depending on the creative team, often hardly having anything in common with previous films outside the broad strokes. The same happened with Batman from B89-B&R. The audiences didn't need to be explained why the tones changed, or why new actors were playing the characters, they simply accepted it. (They may not have liked the end products, but they accepted the fluidity of the changes).
I think this is still a viable option. Give the films some breathing room, recast, and continue on with better stories. Don't reference the older movies, and the audience will go with it.