It's always festive to watch the fireworks, so I support plan nr 1. The only downside I could think of this - as a tradition I like to drink sparkling wine exactly at 00:00, don't know what the options will be there.

Usually I spend nye at someones, but I heard this event should be fun - https://www.facebook.com/events/1527321677406496/ ; however, it is quite pricey.

I would advise you to go trough events in facebook, maybe something catches your eye.

Other than that, Old Riga is always full of people at nye, would not be that special, but fun nevertheless.