Wes writes:

1. Is filter oversized? It is brand new, put in by the pool company
that replastered.

What does Jandy say?

Oversized? Undersized is what you worry about.

2. Which option above is best for this pool? Or other option even
better?

Go with the lower HP, 1 or 3/4. Smaller pumps are much more efficient.
Cheaper to run them longer for the same volume pumped than a larger
motor in shorter time. Better for your pool sanitation as you're
circulating and skimming longer during the day for the same money.

That said, if your existing motor just has bad bearings, bearings are
cheap, maybe $10 for a set. They don't like you to know that at the
pool store, of course, and will deny that you can fix them. But unless
your motor is literally burned out, or corroded badly, you can just
disassemble the pump and motor and replace the bearings. Look for a
bearings distributor locally, or as a second choice an electric motor
repair shop. Or just measure the old bearings and order them out of
http://www.mscdirect.com/.