I always assumed that a lightsaber can be as good as a blaster, but one has to be really, really, good at it, to the point where Jedi are the only ones who can essentially pull it off and thus are still using them. In fact the difficulty in mastering it would be demonstration of what a light Jedi's path is, choosing  a more disciplined, more challenging path as opposed to one quicker and easier. Plus the weapon embodies the classical idea of what a Jedi is supposed to be, a servant and protector of the Republic no matter how much technology and civilizations change. 

I'm going to see how it works with the script.  If it turns out to be more trouble to explain than it's worth, I'll keep the lightsaber for the Jedi, but if I can make it work seamlessly, then I think it would make for an interesting connection to Obi-Wan's spiel on the lightsaber in ANH.

Been working a lot on this lately.  Here's the beginning of Episode I as it stands right now  It's still pretty rough, but I like where it's going:

The Mandalorians are a group of warriors attempting to take control of the Galaxy from the peaceful Republic.  They are mediocre in terms of fighting skill, but their scientific knowledge makes them a formidable enemy.  Experts in the art of cloning, when one Mandalorian warrior is killed in combat, they simply send in two clones to replace him.  At the head of their forces is the mysterious Maul, a dark creature who brings pain and suffering wherever he dwells.

Maul and the Mandalorians kidnap Queen Padme Organa of Alderaan, a key player in the Republic, as leverage to force the Galactic Senate to hand control of the Republic over to them. 

The Jedi have been the guardians of peace and justice in the Republic for a thousand generations.  The Jedi Masters are monk-like Jedi who live at the Jedi Temple.  They are scholars who attempt to learn all there is to know about The Force.  The Masters are responsible for training the Knights.  Jedi Knights are warriors who travel the Galaxy protecting peace, justice, and freedom.

Obi-Wan is a Jedi Knight stationed on the planet of Tatooine, as a kind of Galactic Peace Corps, helping a tribe of Sand People learn to survive with their limited recourses.  Obi-Wan is visited by a fellow Jedi Knight who brings a message to Obi-Wan that he has been given orders to return to the Jedi Temple for a debriefing on his future involvement in the war effort.  Obi-Wan refuses, saying that he cannot abandon his work with the Sand People.  But when the Mandalorians attack the village, wiping out the tribe, he realizes he must return to the Jedi Temple.

As his ship was damaged in the attack on the Sand People tribe, Obi-Wan walks across the desert to the space-port of Mos Eisley to search for a suitable transport.  He enters the infamous Mos Eisly Cantina.  A young man and two aliens are playing a game of sabacc at a round table in the center of the Cantina.  The young man wins, upsetting the two aliens.  A bar-fight ensues.  Obi-Wan, being a defender of peace, takes out his lightsaber and breaks up the fight.  Sitting down with the bloody young man, Obi-Wan learns his name is Anakin Lars, the pilot of a spice freighter, and after learning Obi-Wan’s problem (and what he was willing to pay), he agrees to transport him to the Jedi Temple.

Wow, DL. I really like where you are going with that! So far it sounds like a very natural fit with the implied backstory of Ben's dialogue with Luke in ANH.

I've made some changes.  I've added Qui-Gon into the mix.  So, now Qui-Gon is the Jedi that brings Obi-Wan's message and he follows him along his journey.  However, Qui-Gon is not Obi-Wan's master, but just a friend who was also trained by Yoda.  Obi-Wan considers him a mentor, but he is not his master.  Also, the young man they meet in the cantina is no longer Anakin, but Tarkin, who takes them to Anakin, who is Tarkin's friend and captain of the ship on which Tarkin serves as copilot.

I've been thinking about something kind of radical.  It would mean scratching the story as it is and starting over, but I think it might work and be quite interesting.  I wouldn't be completely throwing out all of the work done, as the ideas discussed and the central characters will still be present.  But here's my idea:  adapt the original rough draft of Star Wars, taking out characters and replacing them with prequel characters.  Obviously it wouldn't fit perfectly, and  a lot would have to be changed, but with some work, I think I could make it fit into the larger story I want to tell, and the story has the advantage of essentially being George's uninhibited creativity from when he could still write well thrown onto paper.  Really just an idea at this point, but I want to know what you all think of this.  Good idea?  Should I give it a shot, or should I just continue with what I have?

Is there some reason you can't do both simultaneously? This is a fan fic forum, not an editor's office! Write what you please.

Well, I don't really want to be stuck writing for the rest of my life, here. lol.  It really would take up too much of my time to do both simultaneously and I have a lot of other projects planned, including PT fan edits that I really want to get around to doing, which I don't have time for until I get the story for this finished and start writing the script, and would definitely not have time for if I took on another script.

Unfortunately due to personal issues, I've had to abandon (or at least put on hold) my rewrite.  However I have been thinking of another project in the realm of the idea that started this whole thing.  Instead of completely remaking the prequels, just remake certain aspects of it.  Reshoot Anakin's scenes with a different actor, older for TPM, less whiny for AOTC and ROTS.  Maybe completely reshoot Padme as well with rewritten dialogue to make her romance with Anakin more believable.  Basically only remake what was bad, keeping the good/bearable things.  Shoot on greenscreen and add them into existing footage.  I know it seems like more work than just a rewrite, but it would actually be a more plausible thing to do with the way my schedule is working out lately.  Not dead set on doing it, but I am tempted.

For Episodes II and III, that sounds like quite a substantial overhaul, since we don't see Anakin until more than half an hour into TPM. While I personally feel that Hayden and Natalie's performances were not the only lackluster ones in the trilogy, tackling just the two of them might yield the most bang for your buck, assuming you're just going to replace two characters.