Not able to set the resolution on the fly, I have to move the status of the User Story to trigger a resolve issue screen pop up.
The resolution field has a pen logo when the user moves their cursor over to denote that the field is editable "on the fly".
That's intended behaviour - if you put the resolution on the "edit" screen, you'd get the pen logo and be able to directly edit it.
But, if you do that, then the users will set the resolution as soon as they use the full edit screen to edit any issues, and you don't want to do that.
Also, this would be a bad idea because you really only want to set resolutions when changing status from a status you consider "open" to one you consider "resolved". And you really only want to be changing the resolution on issues that are resolved, and only when a user has selected the wrong one for some reason while closing it.
I also forgot to say - despite my answer, I don't think you're wrong at the core of what you suggest. I'd like to see resolution demoted so that it's not the "issue is open" flag (it should be done on meta-status), and it *should* be editable as you suggest, but only when the resolution has been set as a result of going into a "closed" type status. Which would actually work if we could put resolution on the edit screen without it being annoyingly set automatically.
If the only annoying part about this is the screen popping up, could it be an option to set the resolution as a post function of the specific transition in your workflow, without defining a screen for it?
Note that this would make the resolution type fixed, not being able to set a different resolution for that transition manually.
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