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Jerusalem has more than 70 names. That's not a myth or a midrash. You can actually count them. Some of them were names given by the different nations that have courted and conquered Jerusalem over the centuries, Hierosylima (the Greek prefix hiero means holy), Aeolia Capitolina (Capital City in Latin), Al Quds, meaning "The Holy" in Arabic.
A large number of the other names are different appellations found within Jewish sources, reflecting the range of different historical and spiritual associations attached to the city; Ir David, the city of David, Ophel, Zion, Yerushalayim etc.
The name Yerushalayim is itself of disputed origin. Some see it as related to the name Irrusalim that appears in the 14th century BCE Armana Inscriptions. Ur means "city of" in ancient near Eastern languages, as in Ur of the Chaldees. Some believe that Yerushalayim is in origin Ur-Shalem. Shalem was the mini-kingdom ruled by Malchitzedek; the Bible's reference to "Malchitzedek, King of Shalem" (who fought on the same side as Abraham, Genesis 14:18), may well be its first reference to Jerusalem. (There are over 700 biblical mentions of Jerusalem.)
The tour guide's explanation, that Yerushalayim means Ir Shalom, city of peace, is probably not etymologically correct, but it remains our hope and prayer.