#1 is the safest and best option. Of course, it is the most expensive. You can bring everything in your house up to modern code as well.

#2 is second best (with the purple being the 3rd best)

#3 isn't practical for most people since you won't be able to find all the "fancy" light controls, gfci's etc.

First, a home built in 1970 is hardly considered an old home. Over the years we have dealt with several homes with aluminum wiring and have never rewired the entire home to copper. One of the serious problems is that often these homes have Federal Pacific panels which we refer to as 'widow makers". Suggest the OP should see with what he is dealing. FP breakers are notorious for not tripping. However, once the panel situation has been determined, bedroom breakers in particular should be on AFCI breakers and recent code changes require all living spaces to be so controlled.

Now, IMO, all receptacles and switches should be upgraded to aluminum compatable. These run about $4-5.00 a pop but are not that much more that using three of the purple wire nuts on each fixture. If you want to use a dimmer or some special fixture, then you can use the purple wire nutted copper pigtails.

Again, check your panel. We have upgraded panels from FP and corrected fixtures in the $2,000 range. We are in Dallas so rates are lower. could be much more depending on where you live.

Properly installed aluminum wiring itself is not dangerous. As you found out, however, properly prepared connections are vital. Personally, I'd feel perfectly safe with properly installed pigtails.

"Properly installed aluminum wiring itself is not dangerous."

Actually, it is.

To make the single solid aluminum wire soft enough for use it is in the lower temper grades, harder grades would break in rolling, unrolling, and normal installation handling.

This makes it very susceptible to deformation from repeated thermal cycles. The wire becomes loose on the screws used to make connections. This increases the temperature and leads to more loosening, and finally arcing.

These problems do not occur with larger stranded aluminum wire since it is much harder. The larger bend radius of the wire prevents fracture problems.

Bending 4/0 aluminum is a real chore, and even harder if it is one of the 'tight packed' stranded styles (the overall cable is run through a set of dies after it is assembled but before insulation is added) and the individual strands are compacted so heavily they are no longer round.

The termination methods allowed for larger stranded wires also provide better connections.

If you want to replace the aluminum you can trade time spent pulling replacement cables against drywall repair time.

The old cables do not have to be removed, just disconnected.
The new cables do not have to follow the same path as the old, and can be fished in to wall cavities without opening the drywall.
Since electricians are more expensive than drywall workers they tend to cut up the drywall to speed the work.
A $30+ an hour electrician is not going to spend 30 minutes to save time for a $10 an hour drywall repair.

You can do the job more slowly and methodically trading wall repair against wiring time.

We rewired a fairly small home that allready had ungrounded copper. The home owner insisted she wanted updated grounded romex. Took a week with three of us and the bill was $5,000.If the OP wants the home rewired in copper with a possible panel and service entrance replacement, all to code, permitted and inspected, Plus drywall repair, $5,000 would be a drop in the bucket. This is not DIY work unless the OP has a lot of experience.

Option 2 is safe, and cheaper if done properly you will have no issues,Hey brick after bending some 750MCM copper that 4/0 ALU feels like kid stuff.LOL!!!

The copalum crimps are much better than the purple wire nuts.

The crimps require tooling and it is expensive and restricted by the manufacturer to folks that have paid $$.