I am happy submitting a new character at a matching tier, allowing her to tune up slightly while we tune down or rewrite to a lower tier, or really explicitely whatever. 

I wouldnt feel demoralized reworking the character, to find a comfortable tier. I also wouldnt object to most of the options, I think the last option is definately the hardest, since we already envisioned these characters as a starting point, rather than an ending point, so if you opted for the last option I would probably ask for the chance to just create a new character that has room to grow more naturally.

So If we are keeping characters a tune up for her or a tune down for everyone is perfectly acceptable, but it should be pretty explicitly clear what power tier you are aiming at.

I am also fine with resets to zero, and creating characters at 'peak' human level that can grow as they are exposed to these heroic and legendary challenges.

In any case I think the core is finding the power tier that feels right to you, then expanding on options that work at that power tier, to allow us room to create unique characters that can grow and develop into something befitting dragon slayers.

Sorry if some of those thoughts are jumbled.