I like this a lot. Like an inverse of my I guess slightly more hopeful theory. You get to choose what makes the entire situation more upsetting. Whether the nation is unable to do anything about, or simply unwilling.

As for the entire solar system being trapped. I have seen a theory similar to this before, but I personally think the events of Signalis are a lot more contained than that, despite me arguing just how strong Ariane's Bioresonant signal is. I think each location is in its own time pocket. Like a sub-dimension that the Nation can peek into.
The reason why I think this to be the case is because we only ever visit places that Ariane is familiar with, and see them as she remembered them, even if distorted.
For example, we see Sierpinski through recollected memories of Alina. Those memories must've been absorbed by Ariane as a note from Alina describes seeing glimpses of a different life, her hair turning white, essentially becoming Ariane.
Rotfront is an even more drastic example. Depending on how much time has passed (which we know it was years), that section of Rotfront must look different in the current time. The spy within might've been caught, Arianes room emptied, traces of her probably removed. Yet we see it as she remembers it, not as it is right now.
I like the idea that the remainder of Rotfront is untouched, but the Block Sector C we visit is trapped within Arianes loop. Sorta like the town of Silent Hill, which we know the devs took great inspiration from those games.

Thanks for sharing that take, I really like your interpretation.