I'm trying to clear up my confusion in using the term "discrete" in discrete logarithm. I'm focusing on why the word "discrete" is used to differentiate it from a logarithm.
Wikipedia defines a discrete logarithm as follows:
in any group $G$, powers $b^k$ can be defined for all integers $k$, and the discrete logarithm $log_b a$ is an integer $k$ such that $b^k = a$.
Is the term discrete added simply to reflect the fact that $k$ in $log_ba=k$ is confined to integers? Or is it a combination of the discrete log being an integer as well as the powers fulfilling the properties of a group $G$?
I'm not sure I understand your dichotomy, but because the generating set in question is discrete, the logarithm is called a discrete logarithm. Here discrete is used to distinguish the logarithm from a continuous logarithm, which would be a logarithm in the real numbers or a similarly continuous set.
This need not happen in a finite group, as long as the group is discrete itself. In a general group, one composes an element with itself a set number of times to achieve a value $k$ (usually by binary exponentiation). When this process is reversed, the values that can be taken by the powers $b^k$ in the set generated by $b$ are discretized, since you can only have integer powers of $b$ in a black box group.
The reason discrete is mentioned is to separate the problem from a similar problem in a continuous case with a continuous set. I we supposed a "continuous logarithm problem" existed it could easily be solved computationally, since one can simply compute the log of both sides of the equation, which I think boils down to Newton's method. Anyways it's fair to say a computer can estimate it quite accurately without trouble.