What's more important, good story telling or adherence to continuity?

Definitely good story telling.

 

I think a good balance of both is equally important.

 

Telling a good Star Trek story, if that’s the show you are writing for. There’s no point writing the finest NYPD Blue story ever, then search and replace character names and locations and calling it Day after putting it on a starship.

Though...you could probably switch a lot of NCIS scripts in. That show is borderline TNG some days.

 

Good storytelling with a dash of continuity acknowledgement.

Lethé was a perfect example of this.

 

Some notable points here about "Lethe":

https://www.avclub.com/another-episode-with-too-much-star-trek-not-enough-dis-1819758431

 

That is neither good storytelling nor good continuity. It would be a cop out. Just as bad as the reset button Voyager pressed on more than one occasion.

 

Story is Job 1. Period. Fanwank is secondary. Always has been, always will be.

 

Storytelling, of course, but at some level, continuity matters.
If you're going to make a Trek show but butcher everything that makes it Trek, then it's obvious that you care about neither storytelling nor continuity, but about the publicity that a known name brings.
I'm not saying Discovery does this, I'm still reserving judgment on the series, but it seems the thread decided that continuity doesn't matter at all.
At that point, why not have a Batman movie/series about a not particularly wealthy man with living, healthy parents called Bud Layne who spends his nights in bed and doesn't fight crime, but nasty stains on carpets?

Also, I've only seen the first 4 episodes of Discovery at the moment, but it seems that sometimes, the creators would answer you question with "option 3: visuals".
The ur-example of that would be that android with not a single spoken line on the bridge: so now, Data is no longer the first android in starfleet (and the whole plot of an episode far superior in writing quality to the first 4 of Discovery is now meaningless) because... they thought it'd look cool to have an android in the background?

 

It's not that it doesn't matter, it's that it shouldn't take place over good storytelling.