Where must you wait?

You chose answer 1, and that’s correct. With a STOP sign, the rule is: first stop at the stop line (the thick white line across your lane). Your front of car must remain before that line while you come to a complete standstill.

Only if there is no stop line, you must stop at the edge of the intersection (before entering the cross traffic). And if your view is still blocked there, you may then roll forward slowly and stop a second time at the point where you can see far enough (“stop–creep–look”). But you must not drive past the stop line to do your first stop, because that would already put you into the crossing area or endanger others (e.g., cyclists/pedestrians).

Traffic lights don’t define the waiting position here; the stop line (or, if missing, the intersection edge) does.