Qu Yuan once wandered in exile in the Yuan River basin and composed many poems there.
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The Yuan River basin is historically associated with Qu Yuan (屈原), the great patriotic poet of the Warring States period, who is commemorated by the Dragon Boat Festival.
Three-drops water radical on the left, the side form of 水. Indexes 沅 in the river-name family alongside 江, 湘, 汉 — the major waterways that lent their names to provinces. 沅 specifically names the Yuan River that runs through Hunan into Dongting Lake.
Right 元 supplies the sound yuán exactly — a clean phonetic match with no tone shift. The 'origin / source' meaning of 元 is sometimes read as a faint semantic echo (the headwaters of a river), but the primary job here is pure sound.