The overwhelming majority say option 2, so I've made a start on that.
A little poster.
I've made an auction Google sheet that should allow people to easily select the players they want. I'll send each of you your own version of this where you can make bids on players.
There is more detail available to look at (skills and mentalities). I have no idea how if it'll work, could be a complete cluster****. We shall see.
Really liked
@relaxedanderson suggestion of using overall rating as a way to determine a base price. Made a couple of tweaks to balance it. Due to the quirks of the skill system in the game though there are probably some overpriced players and some absolute bargains.
I have also founded my own currency: Wa$te Dollars. I shall be giving you W$T1500-2000 to spend on 16 players. Don't spend it all on Jennings like I would. Stokes is currently top price at W$T 95.
The player types I've got are similar to the game:
Batters
Batting All Rounders
All Rounders
Bowling All Rounders
Pace Bowlers
Spin Bowlers
Wicketkeepers
Some real life roles will differ in some instances to maximise the primary skill e.g. Ashwin, Woakes are set as bowlers I would see them as fitting better in Bowling All Rounders. And there might be some all rounders who might fit better in other categories.
I was going to suggest some rules for selections but let's not overcomplicate it. I want to see who is going to be the most shrewd, the most cunning and the most carefree when picking their squad.
One rule I'll say is a squad should have at least 1 player from each category.