Now allow me to provide my reasoning for the first idea now that I'm on my computer.

The first idea seems more interesting to me, but the second idea of a free form sandbox... Yeah, I rarely see them work. Even though players coming up with their own plots can work just fine, I don't see that working out in the long run unless someone comes up with a long running plot (or some weird way to connect them all)... and, eh, I don't think anyone's going to do that.

On the other hand, the first plot seems engaging, and there's a hook for everyone from the start.