Eco, I agree with CulturalAnth. It sounds like option 1 would be the better environment for professional growth - especially through teaching experience - and that's what's going to really matter when you're eventually out on the job market. I've had a couple of friends who went with the more prestigious option and were really lamenting the lack of support and development they could have gotten with some of their other options. I chose a smaller, lesser-known, but incredibly supportive option for my MA and haven't regretted it for a second. The network of support made all the difference, and I'm so glad to have had a completely positive graduate experience thus far while others I know have had their progress hindered by competition or department politics.