New Generator Circuit - 10/3 UF-B to NM-B back to UF-B through attic
Option 1 looks good. For my understanding you still need to transition to a wet-rated wire going back out the wall in option 2, so you don't really &quot;save&quot; anything there. Since the conduit appears to be (at least partly) below 8 feet (thus &quot;subject to damage&quot;), you'll want schedule 80, (if PVC) so you'd want to go with 1-1/4&quot; minimum.
You could also use 1 inch EMT, though you might appreciate having more space, in practice. It is generally &quot;not fun&quot; to get anything very close to the maximum fill through a conduit - but you've basically got straight sections to LBs, so it should not be that bad. Though you have drawn elbows (which should be sweeps if doing that, and sweeps don't go though walls nicely, which is why we normally use LBs or a &quot;pulling elbow&quot; for the most minimal accessible connector.)