Agreed, Opal of Midnight is absolutely beautiful! It has a really cool magical, mysterious, ethereal feel to it. I'd say go for it! It's more distinct than Serena of Gemshore although that one's pretty too.
I love the town name Gemshore, so I picked that option - Serena of Gemshore. I think Opal of Gemshore would sound very nice too, but implies some kind of gem theme for the town, and I'm not sure if you're going for that.
I kind of prefer Serena of Gemshore. I like the sound of it because it's pretty unique.
Opal of Midnight sounds pretty unoriginal. I bet there are plenty of towns called Midnight already. Just my opinion.