I'd go Fungi. My ranger is very similar to your Option 1, with a Fungi, SCHW, a Woodsman's Staff and pretty much nothing else of value aside from some 55 hp rings. I've pretty much shredded my way to the low 30s so far with almost no difficulty. It would be a tiny bit slower with the weaker weaponry, but not enough for me to go Option B.
The Fungi is a overpowered item in my opinion and should be the highest priority for any melee twink.
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