You have a double restriction.
1) You cannot attack anything but a guard.
2) You cannot attack a higher level creature.
Therefore you are out of targets you can attack and can do something else assuming you have no other restrictions, but the one thing you cannot do is attack a target in this zone
To clarify, there are no legal targets in the OP example.
I think you may be thinking of mandatory actions where, if more than one apply, you can choose which one to perform; a ranged attack or move toward Thorg for example.
Remember, target legality is only checked during the declare step of the attack. So if you divine intervention a creature with a guard marker after the attack is declared, the creature can ignore that guard for that sequence.
Also while on the subject of the cowardice "fear" effect, the entire ability is similarly checked during the declare attack step, so you cannot enchantment transfusion it after the attack has been declared and make the target illegal.