I have only done this once, in my own backyard, but I am also in the business of aesthetics, so I thought I would chime in. In my situation we went with option #2.
I would not recommend option #3, due to purely aesthetic reasons, unless you would like to keep the fence low all the way down for some reason (light, neighbors wishes, view). Having the gate suddenly jump up by 4' at the end would be quite strange looking, in my opinion.
If you go with option #2 the fence will be high in the back corner, which will allow for taller plants and more landscaping options, and will just look better in general. You get the same effect with option #1, however, it is more of a pain to do all the cuts necessary to slope the bottom, which after a little bit of growth from the landscaping you will never see. It would really be a pointless detail. In my experience, once we got building we were very happy that we had decided against doing that very thing- it's enough work already! And after just a couple months of growth the bottom of the fence was totally obscured anyway.
I wonder if your house is a mid century style? Horizontal fences always look great with this style of house- I also prefer them over vertical for almost everything. I wish I could send you a pic, but I don't live in the house anymore and am renting it out. Anyway, I hope my two cents helps you decide!
You'll have a hard time getting concrete into a 1" gap. You'll want to either enlarge the hole slightly or use a loose sand mix concrete, which will likely crack up, but should retain the post adequately.
Best Answer
Shear strength of pocket holes isn't that great, I would avoid using pocket hole joinery for fencing.
Pocket hole vs Mortise and Tenon
The pocket holes failed pretty regularly around 100lbs of shear load (of course this depends on the wood tested). The wood began to open up around half that force.
Ideally if you are looking for hidden joints you would use a mortise and tenon style joinery. These are more difficult to make but once set up it isn't all that bad. You can make a reasonable mortise with a drill and chisel and tenons are pretty easy to construct in bulk on a table saw.
Wood glue is also a good idea just for the added strength, the study referenced above showed wood glue had about a 10% effect on pocket hole joints.
EDIT
Based on your update:
I think the best thing here would be to drill a forstner hole 1/2" deep then drill through for a deck screw and screw the deck screw in. Then take a 1/2" redwood dowel and glue it in, then use a Japanese cut-off saw to cut it flush. You can also buy 1/2" hole plugs if you prefer not to cut them off. Match the grain direction with the plug, sand, stain, and you'll never notice they are there.
Here is a commercial tool that does what I'm talking about:
You can achieve this same effect with some redwood plugs, a 1/2" Forstner bit, and a drill.