Hi!
Your option 1 sounds a LOT like my school - yup, really does! I've been at my school since first year, and while strict with everything, I got my good GCSE grades and hopefully will get good AS grades in August.
My school, like your option 1, doesn't do one of my A Level subjects, so I go to a completely different school to do it, and it has been a nice change, because my school is a grammar school while the school I go to do my 4th subject is an all-boys secondary school. My school thinks though my grade will be affected, but I've a natural talent for that subject so it'll be ok.
I'll say this: if you willing to be pushed to the best of your abilities and get top grades, go for option 1. However, it might mean that you will be constantly swamped with work like I have been, and if you're not used to it, unlike how I am, sadly, you'll struggle. But whatever you do, good luck on your AS Levels!