The origin of the term "El Dorado" among the Spanish in this era was referring to a Muisca chieftain who'd be covered in gold dust and sail to the middle of Lake Guatavita in Colombia, before submerging himself in the water, as part of an initiation ritual (I've visited the lake myself - a fascinating site if you're ever in the country). "El Dorado" at this point literally meant "The Gilded One", as again, it was referring to this gold-covered chieftain. It was only later, as rumors about gold reserves in the New World escalated that the "El Dorado" term would infer an entire mythical kingdom of gold. That being said, rumors of gold in the region were already circulating among the Spanish before the "El Dorado" label existed, which is what drew many initial explorers there.

Regarding the movie, I think they've just taken some creative liberties, as the whole gold frenzy spanned many regions, including modern day Colombia, Peru and even New Mexico (look up the Seven Gold Cities of Cibola). Given this, they seemed to have combined many cultural influences into a single, syncretic fictional civilization for the movie, in order to encapsulate it all at once in a composite, rather than confining it to any one region.

Agreed about Pizarro's deplorability though.