#1 sounds like a quick fix that will have a pretty decent pay off.

#2 sounds like a bit more work depending on the # and depth of variants. Punching a few different holes in shanty and calling it a new tile is one thing. A whole new set of shanties, huts, ect... is way more work when there will probably be call for a lot of new tile work elsewhere. You also have to ask if there's really a pay off. I know I rarely take the time to look at my cities on the rendered map. I spend most of my time on the cloth map (because finding stuff on the rendered map is a pain in the ass.)

I think my issue with cities is that they don't look organic. There's no sprawl at all. They're all either nice neat cubes, oblong shapes, or irregular blocks. There's no easy fix for this. But I think having more visible space within the cities (actually roads, more spacious plots for important structures) would make cities look more organic.

In my opinion the design simply needs to be better to make it look organic. I personally believe that a city of Elves from the Elves community project looks more organic than the elemental vanilla sets. We dared go closer to the tile edge with our buildings, and thus we ended up with a coherent design instead of the little plots that you see in vanilla.

Both of these ideas are good. Rotating will get a lot of additional mileage out of existing resources. The potential for multiple possible tiles for a given improvement opens up the possibility for this to improve gradually, as new models are added. I know personally, another two Shanty model or two would go a long way to making my cities far more varied.

Organic design is different, and can have too real meanings. The first is what Heavenfall's talking about, with tile design. Placing buildings off-center in their tiles will help here, in addition to the things people have already said. Putting roads on the tiles is not really a great idea, because getting them to link up is unlikely to work well without a whole hell of a lot of work.

The other aspect of an organic look is building placement. This could be affected by making city design effect the actual city, and not merely the shape of the environment around the city. If buildings next to each other increase benefits (for example, a fungal storehouse next to an imperial farm might yield an additional .5 food) then you encourage the player to make intelligent decisions in city zoning. That would really add a lot in terms of city-building gameplay too. Though ideally the benefits would remain small so that people could easily not worry about that sort of thing when playing easier difficulties.
A more thorough alteration of how city planning works could be good too, and would make an excellent expansion. I'm thinking something along the lines of Black & White 2 cities, as probably the maximum potential for this sort of thing mattering.