Option 2 is correct
When Cloudkill encounters an obstacle it will simply stop spreading in that direction, bunching up along the wall or flowing around pillars. We know this because the spell contains the following text:
The fog spreads around corners. It lasts for the Duration or until strong wind disperses the fog, ending the spell.
If the fog can spread around corners is can certainly flow along walls and avoid obstacles. Think how fluids or fog behaves in the real world.
Additional if the fog was dispersed or the effect ending the spell would say so. It doesn't, it can only be ended by a strong wind, losing concentration or the duration ending.
For example consider what happens if you cast Cloudkill in a ten foot wide hallway. The correct behavior would be that the cloud fills the hallway and extends down it 20 feet in each direction.
If this cloud then moved down the hallway into a larger room it would spread out to a radius of 20 feet from its centre point. Spreading around corners and obstacles.
A counter example of a spell that does fail if it encounters an obstacle is Call Lightning.
The spell fails if you can't see a point in the air where the storm cloud could appear (for example, if you are in a room that can't accommodate the cloud).
Cloudkill does not contain any similar text and therefore does not have this restriction.
What if it hits a 100 foot wide wall?
Rereading your question I realized this is the situation you are actually asking about. What happens when no part of the cloud can pass through or around an obstacle?
In this case there isn't a clear ruling by RAW. But we can attempt to extrapolate from the information we are given.
My interpretation of this spell is that is has a 20 foot radius from the centre point, and that centre point moves directly away from you by 10 feet on each of your turns. If we take this as the correct interpretation then I would rule as follows.
The centre point of the cloud continues to move through the obstacle. And the cloud reduces in size as the 20 foot radius from this point approaches the wall. Once the centre point has moved 20 feet past the obstacle the cloud will have disappeared.
It is up to the DM if there is a gap large enough for the fog to have continued on the other side. If they rule there was a gap (it doesn't need to be very large) then the spell continues on the other side much as it was before.
If they rule that the wall was too solid to pass through then the spell effectively ends. Though you could maintain concentration on it, it has no effect.
The best RAW rule we have for this comes from the general spellcasting rules.
A spell's effect expands in straight lines from the point of origin. If no unblocked straight line extends from the point of origin to a location within the area of effect, that location isn't included in the spell's area. To block one of these imaginary lines, an obstruction must provide total cover.
If we take the pure RAW in interpretation of this then the area would disappear as soon as the point of origin passes through the obstacle, thus providing total cover. For me this ruling doesn't make much sense and I would play it as described above.