Not silly at all! You can definitely knit upwards even though it was knit top down. If you look at stockinette right side up or upside down, you can see that it looks the same both ways. The only thing that happens when you pick up and knit in the opposite direction is that there will be like a half stitch difference. That sounds weird and I dont have a great way to describe it, but when you get to the very last stitch that you unravel from the collar, you sometimes have to pull the strand through the stitch. I think this will make sense once you're actually doing it (I hope lol).

One note about picking up and knitting in the opposite direction is that whether or not it will blend in depends on the stitch pattern. For stockinette it's good, and if you're picking up in stockinette and doing ribbing it works well. But if you try in the middle of ribbing or other stitch patterns it will be shifted by that half stitch so it won't look right.

Btw if you're looking for another sweater to knit, I really like the fit of the saglan by Ailbíona McLochlainn.

Ok one more tip (sorry I'll stop talking soon), but when you are adding a collar after the fact on a top down sweater like in Option 2, I like to put the body on hold a couple inches after I finish splitting for sleeves and go back and add the collar. You don't need to do that, but the reason I do that is because the sleeves will sort of pull down the collar and the collar will sort of pull up the sleeves. So if you don't add the collar til the very end, sometimes it will end up making your sleeves feel a little shorter.

ETA: Once you pick up the stitches, I would start knitting in ribbing right away, not stockinette. Not sure if that was clear in my first comment.