Regarding option 2.
I have a house rule in place “No defective characters.” Briefly, it means the character you create must be one that chooses to go on adventures with the other characters; no lone wolves, no “convince me what I get out of this.” In other words, you sit down to play with everyone else and you’d better do so.
This is essentially option 2: front loaded. There are no story motivations or character motivations at all - whatever you decide to play, you’re agreeing to play and push on and take risks even when a thinking-person would retire with riches, rest up before the big battle, or tell a quest-giver to go pound sand.
Now, I’ll definitely give out additional xp as a carrot. Because, while we are playing make-believe, WE are playing. The characters don’t have motivations, we merely pretend they do. So additional motivation for the players can definitely be warranted, particularly when it leads to further engagement with the game.
As a thought experiment, imagine running a game that the characters were supposed to care about, but the players really didn’t care about at all. No matter how juicy it might be for those characters, if the players aren’t motivated, that’s a dull game.
Insofar as option 2 addresses player motivation, it is wholly good. Motivated players play motivated characters. Gosh, it even helps them play in-character!
(Gotta get back to work)