as a father of two, who still has his high school cuda...74 btw, that is set up like a teenagers car, standard steerign, standard brakes, hot cam and loud muffs...I would go with option 2.
There is nothint cooler then taking your kids out to a crusie night, or your wife to dinner, in a nice running classic. I am now taking the time to tone my car down a bit, power steering, power brakes, and maybe, just maybe a more gentle cam, all to make those type of events more enjoyable.
So yeah number 2 for me.
Besides, once the kids are older, and that little devil does not shut up, you can always hop up the car a bit and go chasing that timeslip etc.
Jason