What changes occur when adding differing amounts of acids & bases?
It is perhaps difficult to comment on the intended semantics of the option 3, but I think that is the most appropriate answer.

Option 1 and 4 are wrong because of the reasons you cite. 

To comment upon option 2, we need to know the pH range over which this indicator changes colour. According to Wikipedia, an unequivocal shift from red to yellow occurs from a pH of $3.1$ to a pH of $4.4$. For our case, we would end up with a $\pu{\frac 13 M}$ solution of $\ce{HCl}$, which, assuming complete dissociation and negligible contribution of $\text{H}^+$ from water, we end up with a pH of around $0.48$ which is well in the no-colour-change region of the pH values.

Regarding option 3, the 'more' just refers the water molecules formed as a result of neutralisation reaction, which are additional to the ones already present in either of the mixing solutions. Along with the formation of 'new' $\ce{NaCl}$ molecules (as in they did not exist bonded to one another before), water molecules are also formed. 

$\ce{NaOH + HCl -&gt; NaCl + H2O}$, i.e. table salt and water