I think the X-Men as part of the MCU are fine, but Marvel just need to exercise some restraint when it comes to crossing over with the rest of the MCU. Have it be an acknowledged part of the universe, but distinctly its own thing, with its own tone and feel.
I wouldn't mind if they retcon some things, to establish that mutants have existed for a while, but this generation of teens/young adults is really the first one where the X-gene is becoming widespread enough for it to be truly noticeable.
There aren't many options but to start with some version of the original X-Men. Maybe not the entire original five, but some of them, and one or two of the Claremont and Lobdell/Nicieza additions. But, if they wanted to do something actually new, they could focus on lesser known iterations, like Kyle & Yost's New X-Men or PAD's X-Factor Investigations.
And, unlike the Fox X-Men movies, they need to be unafraid of just throwing comic book stories out of the window and doing something original. No more Dark Phoenix or Days of Future Past or God Loves, Man Kills.
In regards to casting, I don't see why they would need to cast a POC as Xavier or Magneto, when they could just utilise characters like Storm, Bishop, Dani Moonstar, Dust, Surge etc.