I believe those solid items should be marked as "hidden" from the player crafting menu, and only appear in the Factoripedia, within circuit conditions, or within the chemical plant crafting menu (for converting solids back to fluids). Apart from those locations, there shouldn't be any visual 'clutter' (since I agree that would be quite annoying). If it is appearing in the player crafting menu, then that would be a bug
Fluid output itself would be a worse solution, since it would require manual emptying of pipes (with multiple resultant fluids attempting to occupy the same pipe, it's just an annoyance).
Disabling solid fluids via setting should be possible, should just require a few more if statements. That would make it almost identical to the vanilla recycler, in that case.