This would've been such a great foundation for a B plot in TLJ. The idea that the shadow of Vader looms over Leia's New Republic is inspired. It would answer the audiences' questions about what happened to the Republic after ROTJ, give Leia something to struggle with beyond simply being a leader, and keep Vader as the glue for all nine films. The idea that the public backlashed against Luke/Leia due to their heritage would add a lot of context to why both the New Republic and the New Jedi Order failed. And Kylo fetishizing his grandfather would represent the public's fears made real. Too bad this stuff was relegated to source material
I posted this concept awhile ago as one direction that I thought the trilogy could go (that still retains the characters introduced in TFA). It heavily emphasizes how the galaxy realistically may have reacted to a post-ROTJ world that is suddenly free of the oppressive reign of the Sith (evil Force users) for decades, and the struggle to keep Leia's heritage a secret as she attempts to rebuild a new government:
At the start of TFA, the galaxy is divided into regional sectors all cut off from each other and some vying for total control under the banner of Imperial Remnant forces and under Republic Loyalists / Republic Alliance
Imperial Remnant vs Republic Loyalists (or Republic Alliance) is the major ongoing galactic conflict ; Leia helming Republic Loyalists ; Snoke (or other) leading the Remnant.
This Imperial Remnant leader is a extremely powerful Force user, well versed in the Dark Side, but conceals his power for the most part. He channels his Force powers mainly for tactical dominance as a strategic military leader and to dominate the weak-minded (he easily mind-controls many of his subordinates and regional Governors without them knowing).
Either no New Republic was ever formed OR a New Republic had been formed but was hastily toppled within 5-10 years due to lack of cohesion and undermining influence (and outright attacks) of Imperial Remnant forces (Palpatine Empire loyalists)
Post-ROTJ, there was an extreme backlash against the Force and Force sensitives across the galaxy. The galaxy had just suffered through the failures of the Jedi and the rise of the Sith, both of which put the galaxy through hell --- all at the hands of Force users. There is a major effort to purge the galaxy of Force history of the Jedi & Sith lore
Perhaps this backlash against the Force led to the disbanding of the New Republic ---- it was discovered that one of its very leaders, Leia, was a Force sensitive, and the daughter of Darth Vader at that (though this could have been kept a secret), and how could she (or the new government that she formed) be trusted to lead the galaxy into a new peaceful era?
The Imperial Remnant latch on and use this backlash against the Force and Force sensitives such as Leia to destabilize the new government and attempt to gain dominance over the Galaxy --- however, without any major superweapons, the Galaxy's sides struggling for control are at parity with one another, leading to decades of conflict.
After years of purging strictly history, events occur, orchestrated by the Imperial Remnant leader to lead to a drive to purge the galaxy of ALL Force sensitives.
The Imperial Remnant is the driving force behind this Force purge, led by Snoke (or othe rleader), whose motive is to try to gain ultimate power with no competition --- sectors that they gain control of are subject to this purge, and many local citizens are onboard with the plan, both out of fear and out of blind hatred towards those Force users (both light side and dark side) that were responsible for the galactic upheaval of the past 50-100 years ---- people just want stability and safety, and since Force sensitives are a minority, they are perfect scapegoats. It is easy to want them all gone (think mutant purge in X-Men series). A galactic-wide witch hunt, in a way.
The galaxy has effectively entered a new Dark Age ---- in our history, that was comprised of "a period of scarity of literacy and overall decline in cultural output". This would have been the result of the extreme backlash against Force sensitives and the Force in general, coupled with the lack of any guiding benevolent government.
30 years into this purge of Force sensitives and Jedi/Sith history has left such characters as Rey/Finn etc. to barely know anything about the Force or the Jedi, despite Rey actually being a Force sensitive. This would be why, when Rey/Finn etc. meet up with Han, that Han has to tell them "yes, this is all true....I saw it with my own eyes....the Jedi, Luke Skywalker etc. are not just legends".
"The Force Awakens" could therefore reference a reawakening of the Force in the galactic consciousness and of a Force sensitive (Rey) actually becoming aware of her ability and of its actual significance and place in history.
Backstory on Kylo
Ben Solo had lived a sheltered & unstable life, since his family was in a constant state of conflict after the hasty fall of the New Republic and subsequent Force sensitive backlash/purge. He knew of his Uncle's and family's triumph over the Empire but was never told of his family's deeper history.
Who knew Darth Vader was Anakin Skywalker? Palpatine, Vader, Obi-Wan, Yoda, Luke and Leia. That's it. Four out of those six are now dead. To the rest of the galaxy, Darth Vader was Darth Vader ---- not a Skywalker. Post-ROTJ, Luke & Leia vowed to keep that knowledge secret, for fear of backlash (as they rightfully would find out later, with the subsequent Force sensitive purge).
With the ongoing purge of galactic Jedi/Sith history, Ben Solo never had any real opportunity to be aware of this. He knew of the Jedi/Sith legends, perhaps even some of the OT history, but his Grandfather being Darth Vader? No knowledge.
Ben joined Luke's academy knowing the risks and expecting his Uncle to protect him and train him well in the Jedi arts. He curiously (and alarmingly) showed significant interest in both Jedi AND Sith Lore, despite Luke's teachings.
There was no betrayal of Ben by Luke (or vice versa). The beginning of the true Force sensitive purge began with Snoke & the Imperial Remnant attacking Luke's new training academy before he could adequately prepare them and his entire academy was slaughtered. Luke escaped into hiding, going on a mission to find the original Jedi temple location (Ach-to).
Ben Solo survived the Jedi Academy slaughter strictly due to Snoke's command ; Snoke secretly knew Ben Solo's family history that he himself was unaware of. Just as a Dark Side / Sith always looks for an apprentice , Snoke saw the potential in Ben for bending to his will and using as a right-hand man in the ongoing (and never ceasing, as new Force sensitives are born every day) purge.
Ben was taken prisoner and tortured by Snoke until his body and mind were broken. It was at that point that Snoke revealed Ben's family secret --- Darth Vader was Ben's grandfather ---- his family was responsible for all of the Galaxy's oppression, and Snoke & the Imperial Remnant are really "good guys" trying to ensure that no powerful Force group can ever rise again to throw the Galaxy into the fire. Yes, there is "poetry" between this and the fall of Darth Vader, turning on the Jedi. That is OK, IMO, and actually quite fitting.
Ben cannot believe that his family would keep such critical history from him. In his broken state, he is overwhelmed with rage by this and feels betrayed by all those whom he had loved. Obsessed with gaining more knowledge about Jedi/Sith lore and acquiring more power, he sheds his family's history and family name and goes forward as Kylo Ren, the shattered remains of Ben Solo pieced back together into a monster, psychologically speaking. He takes up the position as right hand man of Snoke, leading the purge of Force Sensitives as the Imperial Remnant takes control of more and more systems in the galaxy.
Secretly, Ben keeps a handful of the Force sensitives with particular promise alive as he conducts the purge and they become The Knights of Ren. He also builds upon his interest of Jedi/Sith lore, which now, in his broken state, has turned into an obsession. He obsessively seeks out old Jedi & Sith relics, attempting to gain power & knowledge from them, extremely frustrated at how much knowledge (and in his broken mind, power as well) was kept from him during his childhood.
The snow scene with Kylo in TFA (from the original trailer) is actually him returning to Endor and digging up Darth Vader's remains, salvaging the helmet.
Han, Leia, Luke etc. all think Kylo is dead, killed in the purge. They have adequately mourned him as of the beginning of TFA and speak about him in the past tense.
Some plot elements (that I have yet to flesh out) can lead up to a scene where Kylo reveals his identity to Han just before killing him. After discovering Ach-To and adequately meditating there, Luke becomes aware of the true identity of Kylo when Kylo kills Han. (More plot elements that can be better fleshed out need to be worked on here)
Backstory on Han/Leia
Han & Leia never separated, and Han didn't just return to a life of smuggling (which makes no sense in his story arc, as the OP has pointed out).
Leia leads the Loyalists/Alliance, similar to her TFA/TLJ role.
Han meets Rey by chance on Jakku in a similar action scene but with Han and Chewie already on the Millennium Falcon when Rey and Finn are chased on Jakku. They were on Jakku for some official Loyalist business.
Rey and Finn are being chased b/c Rey discovered an ancient Jedi relic (perhaps something key to the 1st Jedi temple) that Kylo Ren was actively seeking on Jakku.
Han recognizes the artifact as something significant and bring them to Leia so that she can send Rey off to find Luke and have him use it.
Backstory on Rey
Rey has a very similar story as she has in TFA and TLJ ; no Skywalker relation ; just a Force sensitive girl abandoned on Jakku --- an outer rim world very much cut off from galactic events or historical knowledge.
Ultimately, in the 2nd film, we discover that her parents abandoned her --- yes, Kylo can reveal this to her ; however, instead of abandoning her for gambling money or something trivial (Kylo Ren says this lie to demoralize her), they actually abandoned her in order to keep her safe from the galactic-wide hunting down of Force sensitives that was occurring in the aftermath of ROTJ and the fall of the New Republic circa 5 years after Battle of Endor).
Rey's journey can mimic what she has gone through in TFA and TLJ very much --- seeking out Luke, wanting to be trained, bringing him back to the fight etc.
Backstory on Finn
A lot of rich character development available for Finn. Yes, the movie can open with Finn partaking in a battle that slaughters a village. The scene centers around the ongoing Force sensitive purge. Kylo is there and rounds up those that he senses has Force potential. Poe is doing something of little consequence there and is taken captive as an Alliance prisoner.
A lot of what shapes Finn's misgivings about being part of the Imperial Remnant comes from what he has seen during the Force sensitive purge. He has seen so many innocents put to death, many of whom weren't even Force sensitives. This will make him particularly keen to attach to Rey when he discovers that she is a Force sensitive --- he feels the need to protect her, as he spent so many years being a part of a machine set on destroying those like her.
Finn escapes with Poe as in TFA --- no real changes there.
Finn in TFA mentions being raised as a child soldier by The First Order (in this version, the Imperial Remnant) --- this should be played up more and at some point Finn will revisit a site actively training these child soldiers and be faced with his terrible past.
Need to think more about where Finn's story arc can go, but it should heavily revolve around his guilt in participating in the Force sensitive purge (for many years....more than just one battle) and in his history of being "raised [as a child soldier] to do one thing" (kill Force sensitives).
Backstory on Poe
Poe's role is definitely diminished a bit from his prominence in TFA (no opening scene) but does help Finn escape to Jakku (same scene). Poe's main role is as it is in TLJ ---- heir apparent to the Republic Alliance command and golden boy of Leia's but hot headed, quick triggered etc. and needing to learn many hard lessons about strategy, command, losses etc. TLJ Poe got it right ---- up until the end, when Leia hands Poe the keys to the command despite all of his failures. A lot more growth needs to occur with Poe, but his story is very similar to TFA and TLJ and is more of a side story to the main events.
Overall Point(s) of the Story
Force sensitives and Force history/lore in general being revived throughout the galaxy. Putting an end to the terrible purge being conducted.
Ending the cold war (and regional proxy wars) of the Imperial Remnant & Republic loyalists. Destruction of BOTH superweapons. Ultimate destruction of Snoke/leader of the Imperial Remnant
Luke's (perhaps Rey's) ultimate victory in returning Ben Solo to the light side. Ben Solo will ultimately sacrifice himself to save the Republic/Alliance , fittingly following in his Grandfather's footsteps and perhaps slightly making up for patricide.
Luke passing on the torch to Rey and a new era of Jedi
Finn making up for his terrible past and putting an end to the child-soldier training network that shaped him ; protecting an Rey etc.
Poe learning how to be a wise leader and taking up the mantle of commander from Leia (very similar to what they are doing now)
A lot of gaps to fill in, of course, and much could be pulled frmo TFA and TLJ (probably much of the TLJ could stand as-is) but a fresh take with just a few (key) poetic callbacks to the original lore (particularly with Ben Solo following in Anakin's footsteps in some ways, completely by accident). Trying to keep the story as sensible as possible, answering the questions of "where do we go from here?" after ROTJ as satisfyingly as possible without getting too crazy or too boring and keeping it historically relevant (and fresh) to human history without getting preachy.
