I'm generally in the camp of using intersection names, but I don't have that much of an issue with the neighbourhood names.
Neighbourhood names are useful if they are used, and they are used if they are useful. Once Cedarvale and Fairbank (both names I had previously never heard of before ECLRT) are opened and start being printed onto every TTC map and announced on every Line 5 train, no doubt more people will start using these names for these areas. Simply by using the names, the neighbourhoods referred to by those names will become more specific, useful, and commonly used. Whether doing this good or not is I think a matter of personal preference.
This happened a lot in London for example - stations built in nondescript areas, or undeveloped areas were sometimes given very arbitrary or obscure names, and the neighbourhood became named after the station. Examples include Archway, named because there was an arch bridge nearby, Swiss Cottage, named after a pub, or Queensbury, which was just made up.
There's no need to come up with some kind of systematic way to prioritize, just pick one and use it, as long as there's no duplicates. Eglinton Flats is fine, as is Mount Dennis West, as is Jane-Eglinton. Even using public consultation to pick one would be fine - just ask people living in the area. This seems like a simple and easy way to make public consultation more meaningful.