You have very nice speakers but I doubt that the entry level Elite AVR you have has the stones to properly drive them. Isn’t it a shame that the very AVR’s that need pre-outs the most, entry level ones, don’t have them.
Unless you absolutely want surround sound, your Option #1 is not an option at all. Even a high powered AVR will not deliver the performance needed for quality reproduction of music.
So your Option #2 is the best one. Even an integrated amp at the prices of those models you site, $500-$700, will smoke a flagship AVR costing $2000 plus when it comes to 2 channel stereo and overall audio quality.