This is a strong itinerary with lots of great suggestions. I'll toss in a few more!
Queenstown, in my view, is a fabulous base for exploring portions of the South Island. It has a bit of an Aspen CO vibe (and is actually a sister city) and has heaps of tourism for good reason, with a tremendous range of adventure activities and day-trips organised through established tour providers. Take a day trip to Glenorchy for stunning scenery (used in various movies), toward Cromwell to the east for Otago wineries with some of the best Pinots (Gibbston Valley, Mt Difficulty, others have cellar doors and restaurants), before heading to lovely Wanaka and up the west coast toward the glaciers. And maybe reserve a day or two in QTN with no plans because you'll probably find something of interest to do on the spur of the moment (preorder your Fergburger online to avoid the line though, haha).
NZ has a number of "great walks" and likely the most famous is the Milford Track through Fiordland. There are a limited number of spots, so reservations are essential when the booking window opens. We've done the glamping version (departs from QTN or Te Anau) and very, very highly recommend it: https://www.ultimatehikes.co.nz/multi-day-guided-walks/milford-track (it ends with a lovely boat ride from the aptly-named Sandfly Point to the Mitre Peak lodge with stunning views of the sound).
There are helicopter tours from the Fox/Franz glacier area to the top, possibly with an opportunity to go into a wee ice tunnel, if that's of interest. We enjoyed this and learning about the glaciers and visiting the top was interesting, but the stunning scenery from the air was the highlight, tbh.
Hokitika is part of the "west coast wilderness" bike trail from Greymouth to Ross, if cycling is of interest: https://www.westcoastwildernesstrail.co.nz - we're not avid cyclists, but we've rented e-bikes in Hokitika for an out-and-back towards Lake Kaniere, which takes you through some fairy-tale like forest scenery for a fantastic day trip.
We live in Christchurch, so some suggestions there: it's a lovely mid-size city and great place to live, but not a lot of wow factor for tourism. Take a day to walk through Hagley Park and the botanical gardens, do punting or rent kayaks on the tranquil Avon River, walk over to Riverside Market for lunch and up past the historical cathedral (under repair from the quakes) to New Regent St to view some of the city vibe. Hop on/off Christchurch Trams are beautiful and convenient, and you can even have a dinner on a tram at night and see the city that way. Sumner beach / Taylor's Mistake hike for a taste of beach life here. Highly recommend a day or two to the beautiful Banks Peninsula with hiking, kayaking, or a short harbour cruise out of french-influenced Akaroa to see the world's smallest/cutest dolphins in their natural habitat. Maybe a stay at Otahuna Lodge (Relais & Chateaux) between Akaroa and ChCh to recover from all your activities. 😃
We love living in NZ, but a drawback is that's it's quite remote, obviously. But I guess that's all the more reason to encourage others to combine a land portion of their NZ trip with a cruise, since getting here is a long flight for most. I don't think you'll regret taking extra time in NZ. Back to your original question: you can't go wrong with #1 or #2, but if doing the south island land trip, then #2 itinerary would certainly edge out #1 for my tastes (unless you want to also do a land trip in the north island as well, haha). Hope this helps!