I posted this recently elsewhere:

Get Problem Seeking by William Pena it’s an industry programming Bible. Used it for 30 years from church projects to a $750,000,000. New Urbanism Community Project. It teaches a technique to draw-out and define programs and breakdown the program into manageable parts and ideas that should be explored during the design. It organizes and categorizes things into Goals-Facts-Concepts-Needs-Problems. It’s an off-shoot from Disney Imagineering. There is another book called the same thing authored by HOK Inc. but I have not read it.

First you must Seek The Problem, then State The Problem then start the drawings to Solve The Problem. I think you will find this process, as I did. enlightening and liberating from the puzzle of design.

I add, how in the hell can professors expect to teach design without teaching the exploration of the design problem? Once in high school in my drafting class my teacher didn’t know what to do with me because of my advancement at such an early age. He told me to go off and design “my dream home”. I just sat there for two days wondering “What?” I just started drawing and it just turned out to be a big overblown piece of shit. Learn Problem Seeking and it will lead you to good and functional design.

Of the two options you gave the second will likely result in a more usable building.  For school though find something you're interested in a method, process, software, what ever you would like to learn and apply this to the problem presented by the professor.  Go to the library and look through everything you can find on what your interested in and use this as the basis to run your design. (that's the building with the books)  as much as  people  think everything in the world is on the internet, there is a lot in those books people aren't going to give away for free.  This allows you to add to your knowledge base beyond sitting around navel gazing and thinking up something new and never done before.  I saw a lot of this in school, seemed like an insane way to go about design by people who didn't know enough about the subject to attempt to be new/different/cutting edge.  But in the end school is school you have no budget, very little in the way of direction and no client to worry with.

Make it fun, make it exciting and try to learn something.  Don't take yourself too seriously, and learn to bull$hit in your reviews (this will serve you well for the rest of your life)

It is said, "form follows function" but I'm sure you already knew that. The building needs to be practical, before it can perform as it's intended. I'd rather go to some ugly old church that functions as a church, rather than some aesthetically pleasing church that has no place for pastoring, lack of room and seats, confusing interior layout, etc. I agree with robbmc that the second is the better of the two.