In fairness, Star Wars has always been a hybrid of both. It's a story of spaceships and old wizards inspired by WWII, Vietnam, samurai movies, Arthurian legends, NASA, racing, anthropology, mythology, politics, poop jokes, Flash Gordon, slapstick, where a Sasquatch is a space pilot. It's a mash-up of a lot of different things, which is a big part of its broad appeal.
Oh, I agree. That is where the OT really nailed it. It was a gritty, lived in, broken down physics-based universe that followed rules (strategically breaking without explanation a few that exist in our universe but just wouldn't do; like gravity in space and being limited to c). But it also had 'magic' in the form of the Force, which added an element of mystery and unlimited possibility that would have been lacking in a straight up physics-based universe. It was a powerful, masterful combination. In every age, there are things we understand, and things we don't understand. Acknowledging that just made the OT that much more immersive and 'believable'.
Personally, I prefer that all propulsion systems follow physics-based rules, whatever they are defined to be in that universe, and refrain from acting mystically as much as possible - consistent with advancing the story, of course. I like the idea that those were really scoops for 4 engines, and not turbine inlets for two like they initially appeared. Don't know why I didn't think of that myself. My imagination must be coagulating. ;-)