Well even though Guerrilla War was never released in a standard 8-way joystick version is there ANY way possible to configure it this way in MAME? Can I somehow change certain settings to do this?
Yes, but changing settings won't do it.
You'll have to hack mame's driver code (scr/drivers/snk.c) quite a bit and recompile. You'll need to translate the 8-way to something that mame can translate to the arcades' original input "language" of the 12-direction rotary. You will have to some how match the joystick direction with the character direction, which isn't easy since the original hardware was a non-specific direction 12-way and the character faced 8-ways and there was no fixed relation between the two. I'm not sure, but you might need to keep a "rolling 8 to 12" record to match the original "rolling 12 to 8" the game uses, as if you tried fixed, there would be that one point where the game would see "-7" instead of the +1 or -1, and -7 is the same as +5 in the 12-way hardware but not in the 8-way. And even after all that, you still might have problems with the joystick and character staying synced as the original game didn't have to worry to much about it.
If you try to do it in the core instead of hacking just the driver, you'll have to do more work AFAICT.