gentile is from Latin roots, not Hebrew or Greek. It is used to translate the greek "ethnikos" As you can probably infer the English word "ethnic" is rooted from this greek word and this more carries a proper meaning of "national or foreign" which is closer to the English ethnic. Biblical use is unique for a non-Jew or pagan, hethen, etc and is essentially a term of an outsider from the perspective of Judaism.
it's not really an issue either way as it's a word used only in the gospels pre-Pentecost so out of context. the epistles don't use "ethnikos" they use "hellen" which is the word for an ethnic Greek or wide enough for all Greek-speaking. It is used similarly as "ethnikos" or essentially a non-Jew but I would argue not uniquely as a pagan/heathen as both groups are used to give glory to God and are found to be followers of Christ.
Gentile is not a fair translation as it carries a lot of other baggage with the word and forces these polarized meanings like what you're doing. In context "Greek" is better in the epistles because that's what it actually means nor is it immediately derogatory like Gentile is. So where do we fit? Assuming we're not talking about ethnic Jews then to a Jew we are a Gentile (and always will be) but in context of Christendom, we fit better with "Greek" if we are to force one term or the other. The NT is written in a Roman vacuum so it's terminology is going to be limiting when taken out of the vacuum especially when addressing ethnic terms.
I like how the great commission puts it Matthew 28:19 says "panta ta ethne" or "all the nations", or better yet in Mark 16:15 "pase te ktisei" "all the creation" Who are we? whatever it is we fit in there somewhere.
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