I would go with Option 3, which is pretty much the antithesis of Option 1:
3. Teach her evidence-based critical thinking.
No?
OK. Let’s leave the evidence out of it. 7 year olds quite reasonably don’t want to go reading research papers or sifting through open data resources.
But we can still do critical thinking. Ask her why she thinks you asked her to wear hi-vis. (Presumably, to try to catch people’s eyes?) Ask her whether she thinks catching others’ eyes is a good idea, and ask her what other ways she can think of to do that. See what she says. If she can’t think of anything, wait till you’re outside in town and ask here what catches her eye easily, and see if that makes her think of anything. She might have a bright coat that she likes. She might realise that her lights can be used in the day. Kids are pretty smart, and IMO it’s better to guide them into their own thoughts rather than to dogmatically impose things.
Of course, also explain to her that if a driver isn’t looking, they won’t see her anyway. Don’t leave her with blind faith of these things making her immune from others.
But presumably a 7yo isn’t riding alone among motor traffic, though? A parent is with her, I guess? When I ride with my 6yo for brief stretches of road, I make it my job to position myself where I’m highly visible (and first in line to be taken out) so he doesn’t need to be.
Oh, and keep dropping in questions like “if you had a separate cycleway to ride on do you think you’d need to clutch at all the straws you can to feel safe?” every so often; an additional campaigner in 10+ years’ time won’t go amiss 😉