Actually .... if you're a gambler - there are a few quad core processors that fit that socket - they would probably more expensive though and .... they are 45 watt in contrast to the 35 watt processor you currently have. That means they would generate more heat ... and your cooling system would have to deal with that. Most folks would recommend that you NOT do this but i do it a lot and ... so far so good.
Really I still think option1 is a good choice ... $11 and some thermal paste!
What is it you want this laptop to do?