If you think you can get the upgrade, do Option 1.
If not, I'd offer up that my last several connections through LHR have given me some concern. They had all been 2+ hour connections but invariably flight delays caused that window to shorten and then there's running through LHR to contend with.
Perhaps the ZRH flights will be better on time - I was on BA coming from LIS and DUB and both times they were significantly delayed.
I felt that a missed connection at JFK might offer me more alternatives to get back to LAX than a missed connection at LHR.