That makes sense I think it would work. You have the back story and history for it and you seem like you are excited about writing it this way. Go for it. :)
Even if they are liked by their population/the townspeople, they are still royal and need to maintain that image/lifestyle (if what I've read about your royal family is correct). What you've outlined seems like a good fit for what you want but it also sounds like you are torn between this and...
Do either of your worlds have technology similar, or more advanced, than ours?
If not, I would guess that it wouldn't take very long for history to become legend, and that 5 centuries is more than enough time. Especially since relying on an oral history and a limited printing history (think...
Couple of quick questions for you...I find when in doubt on creating and using names, finding a common thread helps.
I tried to find your first thread, where you outline Aeterna more, but I'm very new here (first post/reply!) and was more excited about responding then hunting down that thread...