1) I concur with your assumption that the judges would likely reject your submission, as it does not have any variance in structure from the source material. Having said that...
2) Your take is still quite enjoyable. Incorporating guitar in place of the original synth pieces gives your arrangement a more aggressive feel that reminds me of the score to Castlevania: Symphony of the Night. While this community favors adding new measures to remixes, I share your belief that there are times when it is nice to listen to a cover rather than a remix. Sometimes, new instrumentation is sufficient, and other times, reinterpretation of the musical motifs is beneficial. I see no reason why both approaches to remixing cannot co-exist with equal esteem given to each.
3) At the end of the day, my philosophy when it comes to any creative endeavor is to first and foremost create something that I enjoy. I realize how selfish that sounds, but such is my outlook. If others enjoy what you are creating, then that is of course welcome, but never is it the end goal. It is not so much that we ought not seek to share creative works that can be enjoyed by others, but if we make ourselves beholden to what others expect, then what we are creating is not truly ours. Ultimately, I choose to submit works to OC Remix only when I feel the project just so happens to overlap with the submission criteria, but never do I change something I've made to fit said criteria unless there is something fundamentally wrong with the composition. As such, there are remixes on my YouTube channel that I'll never submit, and there are others that I am patiently waiting to submit (I already have one arrangement being reviewed by the panel). But to each his own. My friend, I wish you well on your creative journey.