Option 2: Carousel
I could try to pull better quality thumbnails from the full screen videos on youtube, but I don't really love the way this looks in comparison to above, and never like using a carousel on mobile. (It also crops the thumbnails really weird, but I think that's something that could be fixed). We could look into installing a 3rd party slider that has a look more like what you mocked up, but that would definitely require some custom dev.
Option 3: Slideshow w/ thumbnails
Same deal with the thumbnail quality...just wanted to show you this because the
slideshow option does offer a hover title, but I think it looks meh.