If a cadet joins the National Guard, is it true they must resign from CAP, or can they convert to a Senior Member?

They definitely DO NOT have to resign from CAP as CAP has many members who are also active duty service members or members of  reserve and guard units. Cadets may have the option of converting to senior membership (active status) or of remaining a cadet under certain conditions.

Please see the following excerpt from CAPM 39-2:

2.5. Upon Joining the Armed Forces. Cadets who join any branch of the active duty Armed Forces (this does not include military service academies) will furnish CAP/DP written notification along with a CAPF 12 and FD Form 258 (see sample at attachment 5), at which time they will be automatically transferred to active membership status. Additional membership dues are not required for the duration of the current membership year; they will be billed as active member renewals. Note: Cadets who join the National Guard or Reserves are not required to become active upon attending "basic training.” Regardless of the wording of the orders, "basic training" is not interpreted by CAP as "extended active duty." However, National Guard or Reserve members who enter "extended active duty" are not eligible to be cadets and must become active members. Individuals who join the Armed Forces under the delayed enlistment program are not required to become active members until such time as they actually report for duty.