THIS, is EXACTLY what it means to Strike a Middle Ground.
If it's not obvious then, I can't help people.
A middle ground is to give your own character to your own version of the song while staying true to the original.
Which is EXACTLY why I used The Black Mages/Earthbound Papas as an example. These are the perfect official examples of striking a good middle ground.
A good arrangement shouldn't have to take 10 listens to figure out what the source is when the listener is familiar with the original.
And if your listener can't identify with the source at some point in the song then what's the point?
I remember back when I was like 11 and discovered OCR back in 2001/2002 I'd hear remixes that change stuff so much that I would say "This doesn't sound like *insert song* here at all!"
And then I'd hear something that changes the original tune a ton, but it's IMMEDIATELY recognizable and ends up being extremely enjoyable like this
http://ocremix.org/remix/OCR01043/
Or
http://ocremix.org/remix/OCR00633/
I remember hearing these for the first time and being blown away, because they sounded amazing and it was extremely easy to hear what the songs were supposed to be.
Mind you this was before I had ever picked up a guitar, nor knew anything about music.(even though I had played Trumpet and Violin in Elementary School)
So to reiterate, Striking a middle ground is very important. Even more so because it's so much harder to do than just completely change the song altogether , or be completely conservative.
It can be 20% original 80% source or whatever so much as it retains the character of the original songs while giving it your own character (which itself can be a million things from the choice of instrument, to the style of percussion, or even the structure of the piece etc etc)with your arrangement OR instrumentation.
This is my opinion, true (and not a fact), but I will likely NEVER change my view on this mostly based on the personal belief that this is the right and best way to approach things when it comes to , so-called "Remixes"
My personal rule is to generally try to make the song recognizeable within the first minute if i'm making a really widly creative/different type of arrangement or else I know that , if, I was the listener, i'd lose interest by that point.
*cough*Maverick Rising*cough*MMX4/5 Dr.Light*cough*