Your idea is pretty strong I think. By using the re-arrangement it helps you preserve most of the runtime.

I would like you to maybe reconsider removing Padme's queenship. In fact, I thin she should remain the Queen in AOTC. Let me explain myself.

In Ep. 4 we meet PRINCESS Leia. This has been a problem in these movies. Why is a Princess? Because of this I offer this possible work-around. Let Padme maintain her Queen status in all the movies. But also (and this might be harder) we need to find a way to make Bail Organa a King of something... Some sort of royalty instead of a Senator. That would explain how Leia becomes a Princess. Again, I'm not sure how we make Bail a king, but I would love for someone to figure it out.

Regardless, your idea is a great improvement on the original. Good luck on working with the most problematic Star Wars film.