I don't see the competition between option 1 and option 2. Option 1 pretty much is the way to go.
Don't worry about those ebay performance chips, adjustable cam gears, or the light weight flywheel. You need to beef up your clutch before the flywheel. You need cams to even have a use for those cam gears, and the "performance chips" are always just garbage.
Save your money and use it on parts that actually perform. The flywheel is an iffy thing on my list, Just depends if you have upgraded your clutch or not.
Do the basic bolt ons, I/H/E, then if you want a little more power consider a 100 shot of nitrous with a window switch and a tune. You'll see significant gains.
Otherwise just go turbo. lol