I do option 1 a lot in therapy, and it gets me nowhere. Emotional pain is like physical pain - it tells us there's something wrong. I try to avoid the pain because well, it hurts! But feeling it releases it, and it starts to ease up, like lancing an infection so all the crap can ooze out and it can start to heal. (Sorry for kind of a gross post!!) And if I can do this in session, T is always helpful and compassionate, and very accepting and validating. When I hide it from him, then he doesn't get to do his T thing

But seriously, I think option 2 is the way to go, as scary and difficult as it can be. It sounds like you're really thinking this through and are making progress with it.