I love fanfics, especially Star Wars. I have written nearly thirty of my own based on my old Star Wars galaxies characters. So I understand what you want to do here. However, when i write I do a lot of research. I try to stick to the established lore, canon and timeline as best I can. When it comes to established characters, especially big ones like, in your case, Satele and Malgus, I make sure I do not change their history in a major way, if at all.
In your case you are taking huge liberties, something I avoid doing as much as possible. Your basic storyline is fine, I would suggest changing the major players, however. Have you considered replacing Satele and malgus with characters you created? I'm not talking game characters, but ones you create explicitly for this story? I see no reason why you couldn't make a Jedi who is a council member and a Sith who, at the very least, is a follower of Malgus.
Give it some thought. By using your own characters you have much more freedom to make your story work plus you won't have as much trouble trying to make sense out of things, like why Satele would even consider touching Malgus with anything but the blade of her lightsaber.
Well I prefer to stick with the plot as well, even in a SW&LotR crossover I still made sure it would not contradict anything in SW's main plot so I chose to start from the end of current TOR story, which they haven't given the new plot out yet, and avoid original characters unless no existing character could fit the role.
Well, since she could take the risk to work with a Sith Lord who killed countless Jedi and betrayed her ancestor before, permit her Jedi to aid her ancestor with the genocide plan and that frame thing, I think she would consider this. It's not she couldn't kill Malgus later.