I propose we go with both options.
I believe that those that are always in command of a ship should be of Captain rank, with their usual XOs being Commander or Lt.Commander. Adding a rank such as Captain-Lieutenant or Captain 1st/2nd/3rd rank can help differentiate between ship captains and battle group commanders.
I also believe that we should give people a choice (since we are playing a game, rather than actually fighting a war), whether they want to be promoted to the commanding ranks (LtCmdr and up) or if they want to stick as a Lieutenant. If they choose the latter, they can be promoted to Lieutenant-Senior, and left there for as long as they choose. If a LtSr decides she/he wishes to command a ship, that person can be immediately (or in a shift or two) promoted to LtCmdr.