From the information you've shared here, seems as though option 1 would be your best bet.You should consult an architect and run a more in-depth analysis on the construction costs if you're seriously considering rebuilding.The cost of demolition and construction on this could be north of $600K.

The Architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances."

I assume you will need an architect and engineer to get your set of plans going?

Anyone knows an architect for ADU who is local in Bay Area. 

Smith, RA - Principal Architect at Architect Owl PLLC (Licensed in NY & CT)  

I don't think you can build commercial without an architect, but it's possible that changes state to state (I am in California).

The heat combined with the intense sun (UV damage) would deteriorate and degenerate the wood, rendering it not at the same level that it was originally [Wood products are rated/graded, you will see this stamped on wood when you buy it and it is called out by architects and engineers]So unfortunately no, I seriously doubt that the wood is going to be approved.

If not, the city does not have to honor the 2 family use and could require a new use permit where you would need to have an architect or civil engineer submit a new zoning plan and obtain a zoning permit. 

Ask the agent for contractors, handyman, lawyer, insurance guy, the friend who works at the planning desk, an architect if you plan to change things.

Also an architect or contractor can do these inspections.