Number 2 hands down.
We have attended the 2012 and 2013 parties. We mainly go for the parade, trick or treating, and the rides with no lines. While we watch the Villains Mix and Mingle we have never tried to get in line to meet them. We do not like standing in line for characters and much prefer character meals to meet characters. We really like the Villains though and have wanted a Villains character meal for ages.
We have already have our tickets for
MNSSHP on 10/16 and this morning got the Soiree for three adults. We chose the later one since that gives us much of the party to do what we want (we will probably watch parade in the reserved area but then not stay for fireworks and just watch those from wherever we are in the park) and then have the Soiree after we are done with the party and rides.