Which is correct, iTerm or Terminal? (Option as Meta or Esc+)
Neither is correct nor incorrect.
The ESC control code is part of the ANSI escape sequences which was used to send control codes to early terminals like the VT-100.  Emacs used many of these Esc sequences to control how the the user interacted with the program.
The Meta key first showed up in 1970 on the SAIL (Stanford Artificial Intelligence Labs) keyboards, MIT’s Lisp computers and ultimately Sun Microsystems (my alma mater as tech companies go).  It appeared as a diamond key.
The Meta is a modifier key similar (in function) to what the Apple Command key was.  On modern keyboards, it maps to ALT (Option) or the Windows key on PC keyboards.  If a computer lacks the Meta key, you can send the ESC sequence.
Either one is fine, iTerm (IMO) seems to take a more global approach to connecting to various *nix machines where Terminal is Apple/OpenStep (since Apple acquired them) and uses a Meta key.
In the end it’s what you’re more comfortable with - Esc or Meta/Option