JCL only option 2 or 3 would work and I'd be going with option 3.
I'd get the proper connection Waffles otherwise you might spend a whole lot of time and money trying to get something that in the end doesn't work or is crappy at best. Have a look in the UK - they are comparable to USA prices and they run orange indicators
Towbar Electrics for BMW X5 E53 2000-2007 7 Pin Wiring Kit | eBay
My personal opinion and the plug on my vehicle is the 13 pin OEM plug. That way you have the option. Otherwise go the 12N plug.
Auto Barn sell the 13Pin to 7 pin euro adaptor for $50 or you can get them online for a lot less.