While the theory that the gods in Dark Souls are largely based off of Japanese mythology sounds interesting and could very well be right, I should point out that they have a lot of similarities to the Greek gods too, and Dark Souls primarily being a jrpg with mostly western themes, it's probably intentional that they represent two pantheons from both sides of the globe.
As to the theory itself, well... It's a nice story.
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For starters, it doesn't say Seathe feared death itself. He pursued immortality, but that doesn't mean he was necessarily afraid to die. His main goal was to gain the Scales of Immortality, these scales are implied to be what made the original dragons what they were. There's also little evidence that Ornstein interacted with Seathe, and I doubt that alone even Ornstein could take him.
There's also little evidence that suggests Seathe knew Gwynevere, much less gave a damn about her or wanted to pork her.
Finally, the reason lightning type stuff is so harmful to dragons (not just Seathe) is because they were meant to hurt them, especially Sunlight Spear and Lightning Spear, the former being used by Gwyn to destroy the dragons' scales.
Much of this seems like pure speculation or literally made up, I'm not having a go at you man, but when you try to say that Ornstein "regained his full size" from Smough, which was supposedly stolen from him when there's nothing that confirms it, it sounds kind of... well, silly along with some of the other statements you made.
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Ornstein might have been the captain of the four knights because he was the captain of the four knights, he doesn't need to have been a prince or Gwyn's son to do that. Plus, you don't need to be descended from the Lords to have a powerful or special soul, anyone strong enough can build a very powerful soul it seems, the Lords and their kin just had theirs pre made.
His title was clearly just captain of the four knights, implying that for the most part his jurisdiction was over Artorias, Ciaran, Gough and later Smough, he was a body guard and special agent, not a general. Besides, why would Seathe give a damn about Ornstein or vice versa? Their interests had little to nothing to do with each other.