I culled out points 4 and 6 there because they don't pertain to continuity, rather distaste or perhaps plausibility, and are highly subjective even as such. Of course I don't think they hold up as anything of substance regardless, but to address the other aspect of 4 briefly: the semantics call over the implications of the dragon being "weak" is again too presumptive, in this context of relative appraisal there is a vast gulf of capability between "immortal" and "mortal." A mortal being is obviously likely to die, where this effectively immortal one previously could not.
This case rests on some presuppositions that are not necessarily clear and done, and also more possible misconceptions that have never been cleanly put to rest. You also mentioned Gash "imagining" he hears the dragon, but that is not how I ever took that scene myself, even before playing Orta, it was always at least open to interpretation. As you even say every game ends with a hint of conviction towards continuity and endurance, Azel was actually no different in that respect. Azel's search, growth and endurance is implicit, are we to expect this amazingly resourceful and one of a kind expert system would achieve nothing?
I'll save that line of argument for the next context though, and for structure I will address the remaining point of the bottom half first, since it is also basically a plausibility argument.
5) Lathum, disgusting creature, so Gash says. Well in our own world some 'primitive' people coexist with or even eat things that could probably make anyone reading this forum puke to even think about. Though again Lathum are also dangerous... and in all probability highly specialized detoxification agents of the ecosystem, which would be a very pat explanation for that smell don't you think? I have always had my own idea about the mutated-types anyway, I think their behaviors were broadly directed by Sestren and even their overt antagonism towards humans was a modal condition, generally switched on to discourage many people from interfering in densely active regions.
Let's say the Great Fall was a pretty bad time for people in a lot of areas, and in addition to geological and meteorological cataclysms all the monsters start acting weird in different ways as well. Rugged tribes just looking to survive could well have tried to jump on a not obviously hostile Lathum as a slightly more promising alternative to being devoured by a hundred mile wide sinkhole don't you think? Who knows, it isn't even necessary to assume the Wormriders hadn't already figured out something no one else knew long before, maybe they even used the Baldor to mask their presence somehow. A lot of creatures have parasitic/symbiotic dichotomies with smaller creatures, and squatters aren't easy to evict once situated. Not that big a deal in any case.
So about that Sestren shutdown:
1) As I recall Azel describes her search as "fruitless" even though she herself bore a fruit of sorts? That is the strongest suggestion of all that she didn't 'find Edge' or any other emotional denouement of a sentimentally happy sort. But again she was searching for something, just searching for meaning and answers, or some new form of companionship in a world of people who could never relate to her experiences, so there is nothing inconsistent in that portrayal to me. She couldn't really know the meaning of happiness, only connection, life, and death.
At least in both the original and English version, Azel is aware of her loneliness, the lack of connection. Let's say she had said "I don't want you to die Edge" that would split the difference between the two and describe the common denominator of both. I REALLY wish the "love" line hadn't been added but as I put it long ago Azel can't fully know what she's saying there anyway. What she would fully know, if anyone in the world could, is how to go about finding more answers and how to infiltrate any and all remaining bio-engineered systems.
2) So here's the crux of all the presuppositions, and more semantics problems. "The Dragon" says a lot of very specific things to Edge - "I" exist to lead the Divine Visitor / to break the "spell" of the Ancient Age - the Divine Visitor must destroy "me" - the will of the Ancients, it is now with "me" - but then finally it says - Thank you, now "WE" must go... as it reveals four different faces of itself.
In the first place where in any of that is it explicit or even directly suggested that Sestren as an infrastructure or whatever is being destroyed? There is simply no objective continuity problem at all here. Unless you are assuming that it is the "I" of the dragon speaking - that which is now bound with the will of the Ancients - which also survives somehow, but that is not explicit either. And this is the big interpretation issue I have actually mentioned once or twice before, which I formally oppose with: the Divine Visitor did destroy that Sestren / Dragon, according to its own definition. The apparent conversation between Orta's dragon and the Sestren spirit thing is misleading, because it is a memory like all the others in that "memory block" system. This was the choice the living dragon, let's just call it Lagi, made at the last moment it had to either 'cross over' with the whole collective entity or remain and become a mere "mortal" creature. The Sestren dragon spirits and the Light Wing ARE entities which cross beyond conventional boundaries of life and death already, for them to be 'alive' is simply a state of arbitrary restriction and servitude to the Ancient masters who fashioned and focused their own wills from out of the void.
It is why "I" have returned (from where?) And now "we" must go (to where?)
There is no incongruity if you let go of your own mortal context, and take the words for what they plainly state. The dragon which returned to this world was destroyed in this world, and left it again, breaking and taking the spell of the Ancients with it. It was then speaking to the creature(s) which had helped host its mission, with the attitude of an immortal will that could not in turn fully comprehend the attachments of that other essentially mortal will to its life.
3) This is my closest point to agreement, and it's funny because it relates to what may have been the first question I ever asked after joining. I still see the transformation / destruction of the Tower of Uru as a very singular event. After viewing it again later I had to acknowledge it is indeed destroyed by whatever Azel caused, but the initial projection looks exactly like it's supposed to be opening a portal to another dimension, and I'm sure that's the intent. Azel then presumably uses the same incredible energy burst as some feedback against the Tower which 'melts' it in seconds, and it's a big freaking tower...
That WAS a portal to Sestren, the real overlord dimension if you will, a mostly impregnable citadel at the center of everywhere and nowhere. And I assume it was both the instrument and the vessel of the collective Will(s) of the Ancient masters, and when it was indeed destroyed / deactivated / collapsed their illustrious fates were sealed as well. Too late indeed for Abadd to ever fulfill his mission and role.
So we have two at least equally valid interpretations, Gash imagined / mistook hearing the dragon (and we're inside his head) or he did not. It's very easy to imagine one of the final thoughts in Edge's mind as the intent of his commitment to gash, especially in the very moment he knows and accepts it cannot happen. The dragon's mind is not like ours, it feels a sense of purpose and responds, to make the rendezvous, to see Gash is alive, it has fulfilled Edge's last mission. But it also impressed with Edge's deeper commitment, and would have a more tangible connection of its own to Azel. But by one of those interpretations we already know that the mortal dragon had to have an exit vector. This concludes the direct response though.
Are there post-hoc rationalizations in this? Of course, and by the same token if one doesn't like the "story" of Orta as such, and proceeds from the premise that Orta is not or should not be canon, and looks for discontinuity that will be virtually all an exercise in post-hoc rationalization as well.
For myself the question is moot, I'm not about to attempt to disentangle every piece of information and inspiration in Orta from my existing viewpoint and understanding of the Panzer Dragoon scenario at this stage. Nor could I arbitrarily pick and choose which pieces are/aren't, and luckily I have no reason to. Altogether PD remains a marvel of continuity and congruity, without any direct parallel in my personal exposure.