The first option

In my opinion, the first option is the most likely interpretation of the rules as written, probably what the authors were going for, and the best way to run things at the table.

Multiweapon Fighting does exactly the same thing as Two-Weapon Fighting, it just affects more weapons. So if you have more than two weapons, you use Multiweapon Fighting instead of Two-Weapon Fighting, but they amount to the exact same thing.

The game works better if you basically pretend they’re the exact same feat; the distinction is only made because Two is such a common default, and Multi is usually reserved for more monstrous creatures (though there are plenty of ways to access it as a PC).

Sacred Weapon stacks with other weapon bonuses. A warpriest simply cannot raise the enhancement bonus above +5, regardless of the sources of that enhancement, so if a weapon has some enhancement already before using Sacred Weapon, normally some bonuses would be lost. However, instead of increasing the enhancement bonus further, you can bestow special abilities upon the weapon, that replace some of the enhacement bonus you might have had, including the amounts that would go over the maximum allowed +5.

1. Precisely, but you don't have to spend them on abilities. You can simply lose them if you prefer. Why would you like that is anyone's guess.

2. No. You can only replace bonus that would be the result of Sacred Weapon. You cannot replace an enhancement bonus that has some other source. While this is not explicitly stated in RAW, there is a passage saying

   The enhancement bonus and special abilities are determined the first time the ability is used each day, and cannot be changed until the next day.

   That means you choose your enhancement bonus and special abilities without regard to existing bonuses and abilities on the target weapon. You might even choose ones that you have from some other source (spells, weapon enchantments, other player's abilities) and in that situation the enhancement bonus will stack but not exceed +5 in total and the doubled special abilities will not stack. If you decide to use the ability on a different weapon, you have to use the same choice of bonuses and abilities and resolve the final effect independently

3. This fragment means that when Sacred Weapon ability takes effect the enhancement bonus is considered first. In a situation where the weapon is left with no net enhancement bonus, no further special abilities will be added.