I'd do option 2 myself. Technically I see an option 3- putting the couch out in the open, diving the two spaces. Couches don't need to be on a wall- you'd just need a smaller couch to do that and still have space to pass through to the other room.

Hire a interior designer with payment determined before hand for technical advice. Else browse the images and apply your creativity

Jaise Google search karke, tablet dhundkar khane se tabiyat thik nahi hoti vaise hi yaha vaha dhund ne se baat elevation ki nahi banati. Kharcha karo professional advise pe. There is no free lunch in this world for anybody especially technical

The design is ok. On first look, the space around sink is a bit less, you may have trouble keeping dishes after washing. But that could be due to layout. It is a small kitchen. I prefer ceiling height cabinets to avoid dust gathering dead space. Even space above the fridge may have cabinet to store rarely used pieces of crockery. Chimney with its exhaust pipe is a must, not an afterthought. Consider under-cabinet light for workspace lighting; essential in my opinion. I also recommend lighter color of cabinets for this space. Too dark is too dingy, looks cheap and requires more maintenance. But that’s just my opinion. Have fun!