Take option 2, at the end of the day in the park you ll be exhausted.
I honestly find it better to stay the night after going to the park. Reason being you get tired after walking around all day and a drive home may end in disaster if you are exhausted. I will let you know that it will be bust that time of year and you may want to plan what you really want to see and go from there. I live 2 hours from Disney and go a couple times a year.
i think that you can not get all of the park in 1 day with comin in the middle day or leavin early but if you have to i think you should do the 2 because after you have walked all over the park you will want sleep i also think you should plan on what you want to see and ride that way you get in all you want and your sister and cousin hope you have fun!
Get up early and drive and go to DW - middle of the day go and check in to your hotel - take a short nap or just relax - then go back to the park. If you don t stay late at the park you don t get to see the fireworks etc. Then go back to hotel sleep and go home the next day.
One day is never enough but if it is all you have I would go to the Magic Kingdom. Have fun.