My aerodynamics / aircraft structure notes advise that additional wingtip extention OF THE SAME LENGTH as a winglet - endplate.
- has better efficiency
- is structurally lighter
- is more economical to design.
So option 1 always, as long as the resulting wingspan is not a problem. Oh, save from this little flutter thing.
787 wingspan = 60 m
350 wingspan = 65 m
Looking at both, still, the distinction that one is a straight wing and other a winglet is not that obvious to make.