I would say #3 ... but why not do #2 first anyway? See how long at #3 it would take you to beat the monster you've created -- for bonus points pick another team in the same division, or at the very least the same conference. Add a house rule tweak or two at that point, perhaps involving trades to make it harder to stockpile draft picks?
But yeah, #2 then #3 is my vote.
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