Personally I like option 3. A more realistic movement for water using channels to move water. I do like the idea of being able to pump water via pipes but that also would need restrictions to keep people from piping water hundreds or thousands of blocks away and ruining landscapes with water pipes. Ark survival evolved is a great example of water pipes that are ugly and run all over.
Possibly giving people the option to build the water pipes 1 block depth below ground and a limit to how far a pump can push water through the pipes is a decent start. I would hate to see beautiful landscapes molested with pipes.