Harry - the difference between the two option is essentially that you can buy land in otherwise protected areas if you go for option 2.
There's no restrictions anymore for EU citizens, as far as I understood?
Delhidopamine - you can't re-apply for a 5-year card. That's not an option. Change of regulations.
In theory, you can't - the letter of the law says that you must apply for the permanent residency certificate. But in practice, as always, it depends on the situation - if you don't apply for permanent residency within 6 months of the expiration of the temporary residence permit, then you simply go back to square 1.
(and of course, they might just process a renewal of the temporary residency certificte too - depends on who is dealing with it)