Brilliant post @flapjackfairy
OP I am sure you are already thinking in terms of best interest for the child, of course. Hopefully, social services will be able to explain how they interpret these terms differently.
The thing that would worry me personally would be if the child perceives any difference between herself and any subsequent children you have if she is not adopted. If she will call you mum and dad and perceive herself as your child will an SGO or long-term fostering make a difference to that from her perception?
I am not related to my adopted son biologically, he will always have a birth mother and father; and one day may see then again, if he chooses. Personally, I hope he will one day (he is 7, so not for now).
I would like to think children cared for by extended family have all the same protections as those cared for by those of us not biologically related. It seems the perimeters of what these terms mean is quite 'flexible' or at least what they mean in reality.
Unless there is a real benefit to a child not to be adopted, I would choose the route that leads to it (e.g. if SGO, does it mean you cannot later adopt?).
I don't understand why children who are biologically related to people who care for them are not adopted unless birth parents will continue to be involved. Does anyone have experience of continued parental involvement being a good thing?
Anyway, I've only had experience of adoption, with an existing birth child, and four years in, it is going well.
So I wish you all the very best, whatever you choose to do/are allowed to do.