Option 2. The reason is simple.
You are trying to rank your content on a page by page basis and not each page for your website name. That will not do you any good. Each page has to compete on it's own in the search engine result page (SERP) and that means that you must signal what is important for that page.
Follow the headline read order method where the
title tag is the title of the page, the one and only
h1 tag supports the
title tag but is not a duplicate of the
title tag, and the
description meta-tag supports both the
title tag and
h1 tag. The
title tag should have your top 2-3 most important keywords for your page in a conversational format. Your
h1 tag should have the same 2-3 most important keywords in a conversational format plus a few more if possible. Your
description meta-tag should have a few more and should expand the topic understanding. As well, any other header tags, (
h4, ...) should be sub-titles for each section and planned out so that other important keywords are used.
Keep in mind that your
title tag should be about 50 characters or slightly less and if done properly, will be used for the SERP link. Your
description meta-tag, if done right, will be used for your SERP snippet and should be 2 lines optimally. The
h1 tag, and any internal links and inbound back links will be used for clues by the search engine as to what your page keywords should be.
If you use your site title (as you term it) for each page, you will lose out on some valuable search users. You will be misleading them and your bounce rate will suffer. You had it right when you said option 2. Now you know why.