Magic, your instructor should advise you. I'm only a ppl, so I'm offering you my opinion, I'm sure others will have different ideas.
In option one, runups should be able to be completed in less than a minute. Don't know where you got the 5-7 minutes. However, in my opinion, it is important that you minimise your time on the runway. If you are delayed on the runway, I suggest that you hold crosswind. This makes you more visible for acft on final, and allows you to monitor the final approach for traffic.
Airfields octa generally require backtracking, it is unusual to have a taxiway to the threshold. In the case that you may be on a taxiway adjacent to the runway threshold, I was taught that your acft should be positioned into wind for the runups (better airflow into the engine, better cooling); this means, usually you will be roughly parallel with the runway, and hence, perpendicular to the taxiway. That means your thrust stream will be directed away from any acft directly behind you on the taxiway.
So, in general, runups before entering and backtracking. If you are delayed briefly on the runway, consider holding crosswind (or at least obliquely, for reasons mentioned). Prolonged delay on the runway should be avoided.
Regards, and happy landings