I don't like wraparound maps due to the fact that indeed doughnut-shaped world is rather hard to visualize, as you point out...
I don't understand your method 1 , but the 2 is ok for me
In Dominions a province surface does not play any role, so I've no problem with big polar regions.
Anyway the map drawing can put the provinces into a circle so that provinces are not deformed, the only trick then is to link east and west provinces.
The only drawback is that you can't "change" the map view as is possible with a wraparound.
The best solution would be that IW give us a "East/West wraparound" option