I didn’t know about this, but Le Guin offering advice is not to miss.
I think speculative fiction is a great term: it unites genre and literary senses, the best of both worlds!
Though it’s sometimes regarded as a pretentious-sounding term for genre writers who don’t want to associate with genre, I’ve always liked the phrase ‘speculative fiction.
J.G. Ballard, Philip K.
(image by Gorthian, via Wikimedia Commons)